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Sustainable energy: Risks and opportunities of biomass for biofuel The case of Jatropha cultivation in India

Jana Latschan Lehrstuhl für Nachhaltigkeitsmanagement Leuphana Universität Lüneburg Scharnhorststr. 1 D-21335 Lüneburg Fax: +49-4131-677-2186 [email protected] www.leuphana.de/csm/ Mai 2009

© Jana Latschan, 2009. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic magnetic tapes, photocopying, recording or otherwise, without the permission in writing from the copyright holders. Centre for Sustainability Management (CSM) e.V. Chair of Corporate Environmental Management Leuphana University of Lueneburg Scharnhorststr. 1 D-21335 Lueneburg Centrum für Nachhaltigkeitsmanagement (CNM) e.V. Lehrstuhl für Nachhaltigkeitsmanagement Leuphana Universität Lüneburg Scharnhorststr. 1 D-21335 Lüneburg Tel. +49-4131-677-2181 Fax. +49-4131-677-2186 E-mail: [email protected] www.leuphana.de/csm ISBN 978-3-935630-78-8

CONTENT III

CONTENT

Figures ............................................................................................................................... V Tables ................................................................................................................................. V Abbreviations .................................................................................................................. VII Executive Summary ......................................................................................................... 12 1 Introduction ................................................................................................................... 13 1.1 Scope of analysis and research design ........................................................................ 14 1.2 Definitions ..................................................................................................................... 15 2 The theoretical framework of risk analysis ................................................................. 20 2.2 Risk analysis of biofuels ............................................................................................... 21 2.3 The IRGC risk governance framework – towards comprehensive risk governance ..... 22 2.3.1 Pre-Assessment ........................................................................................................ 23 2.3.2 Appraisal ................................................................................................................... 23 2.3.3 Risk characterization and evaluation ......................................................................... 24 2.3.4 Risk management ..................................................................................................... 25 2.3.5 Stakeholder involvement and participation, risk communication ............................... 26 2.4 Methodological approach ............................................................................................. 26 3 Status quo & environment of Jatropha biodiesel production in India ..................... 36 3.0 The ‘system’ of Jatropha biodiesel generation in India ................................................. 36 3.1 India’s energy demand situation and outlook ............................................................... 36 3.2 Policy framework for biofuels and biodiesel in India ..................................................... 38 3.2.1 Federal level .............................................................................................................. 39 3.2.2 State level .................................................................................................................. 41 3.2.3 Other regulations and policies relevant for JBD ........................................................ 43 3.3 Current patterns of JBD production and use in India .................................................... 44 4 Testing the RGF: the case of Jatropha cultivation in India ....................................... 50 4.1 Risk pre-assessment .................................................................................................... 50 4.1.1 Stakeholder perspectives: overview ................................................................... ……50 4.1.1.1 Stakeholder perspectives: industry…………………………………….………………52

4.1.1.2 Stakeholder perspectives: NGOs………………………………………………...53

4.1.1.3 Stakeholder perspectives: government………………………………………….55

4.1.1.4 Stakeholder perspectives: research…………………………………………......57

4.1.1.5 Stakeholder perspectives: banks………………………………………………...58

4.1.1.6 Stakeholder perspectives: the picture in the media…………………………….59

4.1.1.7 Stakeholder perspectives: public opinion…………………………………….….61

4.1.1.8 Stakeholder perspectives in comparison: dissent or consent? …………….…61

4.1.2 Existing risk and hazard screening activities in India…………………………………..64

CONTENT IV

4.1.3 Interim conclusion ..................................................................................................... 68 4.2 Risk appraisal ............................................................................................................... 68 4.2.1 Risk assessment for Jatropha ................................................................................... 77 4.2.2 Concern assessment ............................................................................................... 101 4.2.3 Interim conclusion ................................................................................................... 106 4.3 Risk characterisation and evaluation .......................................................................... 107 4.3.1 Risk characterisation ............................................................................................... 107 4.3.2 Risk evaluation ........................................................................................................ 109 4.3.3 Interim conclusion ................................................................................................... 115 5 Management options & strategies for sustainable energy from Jatropha ............ 117 5.1 Current approaches of risk management for JBD ...................................................... 117 5.2 Companies: a crucial actor for sustainable energy & risk management? ................... 119 5.3 Options for enhancing the sustainable energy scenario: overview and assessment . 121 5.3.1 Management options for a sustainable use of ‘wastelands’ .................................... 123 5.3.2 Management options to reduce income loss risks & increase economic viability ... 125 5.3.3 Management options to conserve biodiversity ........................................................ 129 5.3.4 Management options to avoid intoxication .............................................................. 129 5.3.5 Management options for emission management ..................................................... 131 5.3.6 Management options to foster food security ............................................................ 133 5.3.7 Management options to prevent water overexploitation .......................................... 135 5.4 Selection of risk management options: sustainable supply chain management ........ 137 5.5 Interim conclusion ...................................................................................................... 139 6 Conclusion ................................................................................................................... 141 Literature ......................................................................................................................... 144 Annexes .......................................................................................................................... 163 Annex 1 List of interviews in India carried out in January 2009 ........................................ 163 Annex 2 List of organizations who answered a questionnaire .......................................... 165 Annex 4 Development of the OPEC basket price ............................................................. 166 Annex 5 Examples of state policies for the promotion of TBOs & biodiesel ..................... 167 Annex 6 Land holding patterns in India ............................................................................ 177 Annex 9 Consistency analysis condensed system variables Jatropha ............................ 180 Annex 10 Result scenario analysis................................................................................... 181

FIGURES V

FIGURES

Figure 1 IRGC-RGF cycle: The different stages of the IRGC-RGF are characterized in the

following chapters …………………………………………………………………………………..23

Figure 2 Traffic light mode .. ....... …………………………………………………………………..34

Figure 3 Types of contract farming of companies .. ........................ …………………………...47

Figure 4 Product- and process-oriented value chain model for JBD. ……………….………...48

Figure 5 System grid . ................................................. ………………………………………….72

Figure 6 Traffic light model including large-scale JBD risks . …………………………………115

Figure 7 Classification of risks to risk classes .. . ……………………………………………….121

Figure 8 SSCM including coordination mechanisms and risk management option . ……….138

TABLES

Table 1 Definition & criteria sustainable biofuel energy ......................................................... 16

Table 2 Consistency scale for projections .............................................................................. 31

Table 3 Indicator set for the risk assessment protocols ......................................................... 31

Table 4 Indicator set for the concern assessment .................................................................. 32

Table 5 Intuitive biases of risk perception .............................................................................. 33

Table 6 IRGC-RGF risk management and stakeholder involvement escalator ...................... 35

Table 7 Current patterns of value chain organization in India by actors involved .................. 45

Table 8 Stakeholders analyzed for the case of JBD in India .................................................. 51

Table 9 Issues of problem framing ......................................................................................... 63

Table 10 Variables JBD system ............................................................................................. 69

Table 11 Indicators of sufficiency analysis ............................................................................. 71

Table 12 Scenario analysis: projections ................................................................................. 73

Table 13 RAP Rural employment issue: loss or gain (+/−) ..................................................... 78

Table 14 RAP Wasteland issue: reclamation (+) .................................................................... 80

Table 15 RAP Soil improvement (+) ....................................................................................... 81

Table 16 RAP Wasteland issue: land grab & marginalization of rural poor (-) ....................... 82

Table 17 RAP Pastoralism issue (-) ....................................................................................... 83

Table 18 RAP Food security issue: threat or no harm (+/−) ................................................... 84

Table 19 RAP Energy security & independence issue (+) ..................................................... 86

TABLES VI

Table 20 RAP Foreign exchange issue (+) ............................................................................ 87

Table 21 RAP Non-marketability of JBD / business failure (-) ................................................ 88

Table 22 RAP Income loss for farmers (-) .............................................................................. 89

Table 23 RAP Relative emission reduction vs. negative life cycle net emission (+/-) ............ 91

Table 24 RAP CDM income generation issue (+) .................................................................. 92

Table 25 RAP Particulate matter issue (+) ............................................................................. 93

Table 26 RAP Biodiversity loss issue (-) ................................................................................ 94

Table 27 RAP Allelopathic effect / suppression of local vegetation (-) ................................... 95

Table 28 RAP Diseases & pests: controllable or pest bank (+/-) ........................................... 96

Table 29 RAP Afforestation (+) .............................................................................................. 97

Table 30 RAP Water: conservation or overexploitation (+/-) .................................................. 98

Table 31 RAP Fuel safety (+) ................................................................................................. 99

Table 32 RAP Intoxication (-) ............................................................................................... 100

Table 33 Discrepancies risk assessment and perception .................................................... 109

Table 34 Synthesis: risk evaluation and characterization under agro-business scenario .... 113

Table 35 Intermediate assessment of JBD against sustainable energy criteria ................... 115

Table 36 Assessment criteria for management options ....................................................... 122

Table 37 Option assessment for wasteland use related risks .............................................. 125

Table 38 Option assessment for increased economic viability ............................................. 128

Table 39 Option assessment to avoid biodiversity loss & allelopathic affects ...................... 129

Table 40 Option assessment avoiding intoxication .............................................................. 131

Table 41 Option assessment for emission management ..................................................... 133

Table 42 Option assessment for reducing pests and diseases ............................................ 135

Table 43 Option assessment to minimize water exploitation ............................................... 136

ABBREVIATIONS VII

ABBREVIATIONS

ADMP Analytical Decision Making Process

ALARP As Low As Reasonably Possible

BACT Best Available Control Technology

bn Billion

BREL Bharat Renewable Energy Ltd.

BPC Bharat Petroleum Corporation Ltd.

BtL Biomass to Liquid

CBDA Chhattisgarh Biofuel Development Authority

CDF conventional diesel fuel

CDM Clean Development Mechanism

cf. confer

CECOEDECON Centre for Community Economics and Development Consultants Society

CoC Code of Conduct

CSIR Council of Scientific and Industrial Research

DBT Department of Biotechnology, Ministry of Science and Technology

DDS Deccan Development Society

EBI Energy Biosciences Institute

e.g. for example

EU European Union

FAO Food and Agricultural Organization

FDA Forest Development Agency

FMFAC Federal Ministry of Food, Agriculture and Consumer Protection (D)

FSA Functional System Analysis

GARP Global Association of Risk Professionals

VIII ABBREVATIONS

GDP Gross Domestic Product

GHG Greenhouse Gases

GoC Government of Chhattisgarh

GOCL Gujarat Oleo Chem Ltd.

GoI Government of India

GoR Government of Rajasthan

GoTN Government of Tamil Nadu

Gtz German technical cooperation

ha Hectar

HC Hydrocarbons

HT Hindustan Times

IAEA International Atomic Energy Agency

IARI Indian Agricultural Research Institute

ibid. ibidem

ICRISAT International Crops Research Institute for the Semi-Arid Tropics

IEA International Energy Agency

IFEU Institute for Energy and Environmental Research

IOC Indian Oil Corporation Ltd.

IRGC-RGF International Risk Governance Council - Risk Governance Framework

IT India Today

JBD Jatropha Biodiesel (=JME)

JFM(C) Joint forest management (committee)

JME Jatropha Methyl Ester (=JBD)

JV Joint Venture

KEAG Kalpavriksh Environment Action Group

ABBREVIATIONS IX

LCA life cycle assessment

LCS life cycle stage

MB Mission Biofuels

MGIAS Mahatma Gandhi Institute of Applied Sciences

MNRE Ministry of Renewable Energy

MoEF Ministry of Environment and Forest

MoIB Ministry of Information and Broadcasting

MoPNG Ministry of Petroleum and Natural Gas

MoRD Ministry of Rural Development

MoSPI Ministry of Statistics and Programme Implementation

MoST Ministry of Science and Technology

NABARD National Bank for Agriculture and Rural Development

NABCONS NABARD Consultancy Services

NAIS National Agricultural Insurance Programme

NAPCC National Action Plan on Climate Change

NARI Nimbkar Agricultural Research Institute

NCDB National Committee on Development of Biofuels

NGO Non-Governmental Organisation

NMB National Mission on Biodiesel

NOVOD National Oilseed and Vegetable Oils Development Board

NOx Nitrogen Oxides

n.p. No paging

NREGS National Rural Employment Guarantee Scheme

p.a. Per annum

PC Planning Commission, Government of India

X ABBREVATIONS

PM Particulate Matter

PPO Pure Plant Oil (see also SVO)

PPP Public-private Partnership

PRI Panchayati Raj institutions

QCA Qualitative Content Analysis

OECD Organization for Economic Co-operation and Development

QPM Quality Planting Material

QSA Qualitative system analysis

RADD Rain Shadow Areas Development Department

RAP Risk Assessment Protocol

RGF Risk Governance Framework

RSB Roundtable on Sustainable Biofuels

SFD State Forest Department

SHG Self Help Group

SPWD Society for Promotion of Wastelands Development

SOB Southern Online Biotechnologies Ltd

SSC Systemic scenario construction

SSCM Sustainable Supply Chain Management

SVO Straight Vegetable Oil (see also PPO)

t tonne

TBOs Tree Born Oil seeds

TERI The Energy Research Institute

TOIL Tree Oils India Ltd.

UNI United News of India

VAT Value added tax

ABBREVIATIONS XI

yr Year

WBGU Wissenschaftlicher Beirat der Bundesregierung Globale Umweltverände-rungen

WCED World Commission on Environment and Development

wd working days

WWF World Wide Fund for Nature

12 EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

“There is no energy production or conversion technology without risk” (IAEA et al. 2005, 1)

Energy is one of the core needs of India like of virtually all other countries. Satisfying its ever growing energy need is a challenging task for the country, even more, as at the same time the demands of a growing population and economy as well as an aggravating environmental situation need to be met. One solution is seen in exploiting to the maximum extent possible the potential of bioenergy, foremost biodiesel made of the perennial plant Jatropha. Jatropha has been hyped all over the world as a ‘green solution’. But there is nothing like an easy so-lution to such a demanding task. Also Jatropha is linked to a series of risks. The Risk Gover-nance Framework, developed by the International Risk Governance Council, is utilized in this master thesis to identify, assess and evaluate risks of a large-scale production of biofuel from Jatropha in India and also to develop and assess corporate risk management options. The aim is to identify those options that reveal the potential of Jatropha to become a sustainable energy source for the upcoming decade.

Keywords: Jatropha, India, biodiesel, risk governance, sustainable energy.

INTRODUCTION 13

1 INTRODUCTION

Following years of praising the advantages of bio mass and bio energy, a heated debate about ecological and economic disadvantages of bioenergy and especially biofuel use emerged, which is currently fostered by a broad range of actors including companies, politi-cians to civil society members (cf. Fritz 2007). In order to contribute to this debate on a scien-tific basis, this master thesis analyzes the case of large-scale Jatropha production for biodie-sel as a transport fuel in India, as also Jatropha has been subject to a global hype (cf. Jong-schaap et al. 2007, 5). Particularly India is among its biggest supporters and one of the 'early-movers' of cultivating Jatropha as a biodiesel crop not only in Asia but also worldwide (cf. GEXSI 2008, 25, 29, 123, 128). Although India offers a broad variety of potential alterna-tives for biodiesel production, strong focus is put on Jatropha (cf. TERI & gtz 2005, 6). Jatro-pha – an uneatable plant – has become increasingly popular for several reasons: It is as-sessed to solve ethical and ecological problems of ‘conventional’ biomass for bioenergy and biofuel, like the problem of competition with food production, deforestation for energy crops, monocropping, negative net CO2 balance etc.; it is, moreover, perceived to satisfy growing energy needs as well as to foster rural development (cf. PC 2003). Jatropha is not only grown for local energy supply. It is cultivated on a larger scale and as cultured plants for in-dustrial purposes, especially biodiesel, to be part of national energy security programmes. Therefore, several companies and organizations are testing Jatropha in India as a source for biodiesel (JBD, Jatropha-Methyl-Ester). However, first researches show that, apart from po-tential benefits, large-scale Jatropha cultivation as biodiesel crop can imply a series of nega-tive consequences, such as competition for fertile land with food production, disputes about the use of ‘wasteland’ or negative environmental impacts due to the need for an increased crop productivity (e.g. water consumption) (cf. Shiva 2008).

The underlying research questions linked to this development of Jatropha as a cultured plant for industrial purposes (biofuels) are related to its positive and negative consequences as well as to the management strategies of its cultivation:

- Which (emerging) risks are linked to large-scale Jatropha cultivation for biofuels in India in view of economic, ecological as well as social aspects?

- Which strategies have been developed and implemented so far, especially by Jatropha producing companies, research institutions and the Indian government, to deal with these risks and to maximize benefits?

On this basis, the present master thesis seeks to analyze the necessary preconditions to guarantee a sustainable energy production for biofuels generated from Jatropha in India. It will, furthermore, extrapolate on future management strategies for the corporate sector to support the sustainability of Jatropha cultivation and processing. It will shed light on the sur-rounding conditions, in which companies involved in the JBD business are acting, such as policies or attitudes and risk perception, all impacting on the ability and ‘license to operate’ of a company. At present, analysis on the JBD industry in India remains widely focused on for-

14 JANA LATSCHAN

mulating risk management recommendations for the government sector and its institutions.1 Yet, companies are assumed to strongly influence the way risks are created and by whom they are borne. One third of India's Jatropha plantations are managed by private companies, another third is managed by public-private partnerships (PPP) (cf. GEXSI 2008, 33). Hence, the special focus of this master thesis will be to look at the risk management options, which the corporate sector can develop and implement. This analysis will provide companies with insights into the environment, in which the JBD business operates, and provide a basis for contributing to a sustainable energy production while engaging in the JBD business.

This thesis assumes that Jatropha is no riskless biomass option to solve large-scale energy needs and that it implies transboundary risks (cf. IRGC 2007b/c). Hence, a more differen-tiated view in the framework of risk governance is needed and can contribute to a sustaina-ble energy generation from Jatropha. Therefore, this thesis applies the International Risk Governance Council’s (IRGC) Risk governance framework (RGF) as a ‘meta-method’. The framework aims at “providing a common analytical structure for investigating and supporting the treatment of risk issues by the relevant actors in society” and has been designed espe-cially for “globally relevant risks” (Renn 2008a, 3). It includes the stages of risk pre-assessment, risk appraisal, risk characterisation and evaluation as well as the identification of existing/new risk management approaches. Risks associated with large-scale biodiesel production from Jatropha are judged as globally relevant and requiring an inclusive, interdis-ciplinary, and comprehensive governance process. The IRGC risk governance framework is ex ante considered as an appropriate tool for analysis as it explicitly targets risks related to new energies and technologies (cf. IRGC 2005, 5), although it primarily addresses govern-ment and international agencies as main drivers of risk governance (cf. Renn & Walker 2008, 340). A short evaluation will address the strengths and limits of the IRGC framework in the case of (corporate) risk governance for large-scale Jatropha cultivation in India.

1.1 Scope of analysis and research design

The use of the term ‘Jatropha’ in this analysis refers to the species of Jatropha curcas, one of several hundred known species of the plant (cf. FACT 2006, 3; Kaushik et al. 2007, 303). The issue at stake in this thesis is the production of biodiesel based on Jatropha curcas in India on a large-scale, with the main purpose to provide transport fuels in substantial quanti-ties via its plantation on a high amount of total land covered. This implies that risks linked to the small-scale application, e.g. in generators or in household stoves of local communities, are not subject of the analysis. Additionally, problems pertaining to the stage of application either as straight vegetable oil (SVO) or as transesterified biodiesel in specific engines are not dealt with, as these are judged as rather technical challenges and not as relevant risks following the understanding of the IRGC-RGF, while general, e.g. environmental impacts from its large-scale application as transport fuel are considered. The research period covers the time from the first intensive promotion of Jatropha by the Indian government in 2002/3

1 See for example on risk management recommendations for the Indian government: Adholeya & Dadhich 2008, 224 et sqq.; Altenburg et al. 2009, 115 et sqq.; FAO 2008a, 88 et sqq.; PRAYAS 2006, 39 et sqq; TERI & gtz 2005, 84 et sqq.; or governments in general: Doornbosch & Steenblik 2007; TERI & gtz 2005, 23 et sqq.; WBGU 2008, 333-352; WWF 2006. Recommendations for the private sector rather refer to technical issues of cultivation and processing (see e.g. Achten et al. 2008, 13 et sqq.; DBT 2006; FACT 2006; TERI & gtz 2005, 26 et sqq.).

INTRODUCTION 15

until January 2009. Therefore, those factors influencing the issue at stake have been ana-lyzed, which have materialized until that date. However, the media analysis focused on the period of January 2007 until January 2009, as its aim is to provide an actual insight into me-dia coverage on Jatropha and risks linked to it. As explained before, this thesis aims at de-veloping risk management options for the corporate sector; hence, wherever a special pers-pective needs to be taken (foremost in chapter 5) it will be the one of a potential coporate risk assessor or manager.

The thesis is structured into one theoretical and methodological chapter and three analytical chapters, wrapped up in concluding remarks. Chapter 2 will present the theoretical approach for the succeeding analysis by shedding light on the current landscape of risk analysis and, subsequently, by featuring the IRGC-RGF and its assumptions and characteristics. Further to this, chapter 2 will set out methodological instruments applied within the analysis, like expert interviews or qualitative content analysis. Chapter 3 will give insights into the ‘system’ of JBD business in India in terms of relevant policies, surrounding conditions like economic devel-opment and demand for biofuels, legislation and the current structures of value chain organi-zation. Chapter 4 will then test the IRGC-RGF for the case of large-scale JBD production in India as far as the steps of pre-assessment, risk appraisal, risk characterisation and evalua-tion are concerned. This chapter will thus integrate issues of risk perception as well as hard facts of scientific research. It will conclude with a judgement on the (in-)tolerability or accep-tability of risks. Chapter 5 will define risk management strategies for the corporate sector based on the findings of the previous chapter and will start with looking at existing risk man-agement approaches. Its aim is to define risk management strategies which do not only fulfill the criteria set by the IRGC-RGF but also enhance the potential of Jatropha as a sustainable fuel option. Chapter 6 will conclude this thesis with a feedback on the IRGC-RGF as a tool for risk governance of large-scale JBD production and a summary of major results.

1.2 Definitions

The key terms in the following analysis are ‘risks’, ‘hazards’ and ‘sustainable energy’, which require a further definition of their particular understanding in this thesis, paying special at-tention to the definitions provided by the IRGC-RGF. There are two recent approaches to define the term, one looking at energy in general, the other specifying this term for the case of biofuels.2 The former definition has been elaborated by a multi-agency cooperation be-tween the International Atomic Energy Agency (IAEA), the OECD International Energy Agen-cy (IEA), the UN Department of Economic and Social Affairs, Eurostat, and the European Environment Agency (cf. IAEA et al. 2005, 25). This definition argues that energy is only sus-tainable if it serves the goal of “good health, high living standards, a sustainable economy and a clean environment” (IAEA et al. 2005, 1), thereby keeping in mind equally “economic, social and environmental consequences” (IAEA et al. 2005, 2). It explicitly builds on the gen- 2 However, these are not the only attempts for defining ‘sustainable (bio)energy’ or sustainable development pathes (see e.g. Renn & Deuschle et al. 2007, 76 et sqq.). The German Advisory Council on Global Change is-sued in a recent study indicators and ‘guardrails’ for sustainable bioenergy (WBGU 2008, 299 et sqq.) as did the WWF and the German Öko-Institut (WWF 2006). Furthermore, the FAO is working on “social and environmental sustainability criteria, including limits on deforestation, competition with food production, adverse impacts on bio-diversity, soil erosion and nutrient leaching“ for bioenergy (FAO 2008, 70; see for further standard approaches: FAO 2008, 69-70).

16 JANA LATSCHAN

eral understanding of sustainable development as laid out by the Brundtland Commission, which highlights the need of inter- and intra-generational justice on a global scale by defining sustainable development as a “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (WCED 1987). Addi-tionally, a recent initiative by the Roundtable on Sustainable Biofuels (RSB 2008), including a multi-stakeholder consultation process, is taken into account. Based on a “triple bottom line approach of sustainability, biofuels shall be environmentally sound, socially fair, and econom-ically viable” (RSB 2008, 2). Following this understanding, the RSB defines standards for sustainable biofuels. Both definitions overlap regarding the criteria applied to define the is-sue. They also show some distinctions. But these are judged as a mutual fecundation rather than a contradiction. Hence, an integration of both approaches is done to define sustainable biodiesel as a particular form of sustainable energy. Table 1 lists the criteria foreseen in each document, while the left column includes the summary of them.

Table 1 Definition & criteria sustainable biofuel energy (Source: own compilation based on IAEA et al 2005, 11-5; RSB 2008, 3-9.)

Criteria sum-mary

IAEA et al 20053 RSB 2008

Access equity equity in terms of accessibility and affordability of energy

(not specified)

Health &

Safety

health in terms of safety of the production process

(not specified)

Efficiency use and production patterns including aspects of efficien-cy, and pro-ductivity

ensurance of cost-effectiveness and efficiency in the entire value chain

Diversification diversification of the energy mix, with a special focus on non-carbon and renewable energy shares

(not specified)

Energy

security

energy security in terms of import avoidance and stock building

(not specified)

Emission reduc-tion,

impact on the atmosphere measured by the greenhouse gas (GHG) emissions evoked

reduction of GHG emissions in the over-all life cycle (LC) including aspects of land use changes in comparison to fossil

3 See for a complete overview of all criteria, IAEA et al. 2005, 11-5. However, the report highlights the need of adaptation and selection of the criteria on a country specific basis due to the different development patterns of single countries (IAEA et al. 2005, 25).

INTRODUCTION 17

air quality and the effect on air quality fuels; prevention of air pollution

Water / Soil sus-tainability,

biodiversity

impact on water and soil qual-ity, forests and waste genera-tion

avoidance of negative impacts on biodi-versity and ecosystems, improvement of soil quality, sustainable use of water resources

Compliance (not specified) compliance with national and interna-tional laws e.g. on environmental protec-tion or labour / human rights, no violation of existing land rights

Participation (not specified) application of multi-stakeholder engag-ing participatory consultation, planning, and monitoring process for biofuel projects including social and environ-mental impact assessments

Social / rural development,

food security

(not specified) promotion of rural and social develop-ment, minimization of negative impacts on food security

The synthesis of these criteria – judged as a comprehensive evaluation scheme of sustaina-ble energy – is used to assess the sustainability of JBD production and risk management options.

‘Risk’ is another key term of this analysis. The definition of ‘risk’ has often been subject of analysis and interpretation (cf. IRGC 2005, 141-2; Renn 2008b, 50). Some define ‘risk’ by decomposing it in different ways, e.g. defining the risk source (hazard), risk targets, adverse effects caused, causal mechanisms as its constitutive parts (cf. Cox 2002, 8-9), or by defin-ing the outcomes, or the likelihood of occurrence and the specific context of a risk as consti-tuting a risk (cf. Renn 2008b, 50). Others reduce risks to physical measurement and proba-bility calculations (cf. Rohrmann & Renn 2000, 13) or describe it as the “outcome of uncer-tainty” (Mun 2004, 13). There is neither a common understanding in the public (cf. Rohrmann & Renn 2000, 13), where risks are sometimes reduced to the negative impacts on humans, nature or societal systems (cf. IRGC 2005, 141-2; Rohrmann & Renn 2000, 14) or mixed up with the terms ‘hazard’ or ‘harm’. Therefore, a proper understanding and differentiation be-tween these terms is crucial. The term risk is defined as “an uncertain consequence of an event or activity with respect to something that people value” (IRGC 2007a, 3; also Renn 2008a, 5). It is important to underline that consequences can be negative as well as positive. The term ‘uncertain consequence’ in this definition already hints at the two components that are constitutive parts of risks: the overall likelihood that a consequence occurs and the inten-sity or scope of impact of a certain risk on a risk absorbing system in terms of time, place and subsystem (cf. Renn 2008a, 5). ‘Subsystem’ refers to the fact that within a given system, e.g.

18 JANA LATSCHAN

a society, different groups or sectors can be affected to different degrees, depending on their robustness, defined as the “insensitivity (or resistance) of parts of systems to small changes within well defined ranges of the risk consequences” (IRGC 2005, 81) and on the overall sys-temic resilience as a “protective strategy to build in defences to the whole system against the impact of the realisation of an unknown or highly uncertain risk“ (IRGC 2005, 79).

As one of its basic assumptions, the IRGC-RGF emphasizes the definition of risks as mental constructs (cf. Renn 2008a, 11). Following this understanding, risks are what people perce-ive as risks. This is strongly influenced by the knowledge available. Consequently, perception and appraisal of risks vary between individuals or groups. Analyzing stakeholders involved and their perceptions of risks is therefore an essential task. But as capacities and resources for identifying risks are limited, risk identification is selective or might be blurred by cultural values, or risk selection is guided by a specific systematic reasoning. Hence, it is essential for every risk governance process to contribute to a systematic, fact-oriented analysis without ignoring the need for integrating the different risk perceptions and evaluations of stakehold-ers.

As mentioned above, risks need to be distinguished from hazards. The latter are defined as

“the potential for harm or other consequences of interest [...] Hazards characterise the in-herent properties of the risk agent and related processes, whereas risks describe the po-tential effects that these hazards are likely to cause on specific targets” (Renn 2008a, 5-6).

Therefore, a hazard only turns into a risk if it is probable that its potential for harm is released in a way that harm can actually be produced (cf. Renn 2008b, 50).

Furthermore, the IRGC-RGF focuses on systemic risks. Those are characterized by com-plexity, uncertainty and ambiguity (cf. Renn & Schweizer et al. 2007, 176). Additionally, this kind of risks is embedded in a larger transnational context of socio-political, ecological and economic impacts and is closely linked to other risks, requiring a robust approach between different inter- and transnational actors (cf. Renn 2008a, 6, 9). This approach can be de-scribed as a governance process. Governance processes include decision-making proce-dures and collective action on a horizontal level, i.e. in a predefined geographical and/or functional segment, and/or on vertical level, i.e. between different segments and actors on different levels (cf. Renn 2007a, 1-5; also Renn 2008a, 9). Translated into risk governance, this means that

“risk governance includes the totality of actors, rules, conventions, processes, and mechanisms concerned with how relevant risk information is collected, analysed and communicated and management decisions are taken” (Renn 2008a, 9).

The RGF stresses the importance of stakeholders. ‘Stakeholders’ are generally defined as individuals or groups who assert their claim (stake) to a certain issue and/or organisation (including e.g. companies, government bodies) (cf. Schaltegger & Petersen 2007a, 28). The-reby, this definition of stakeholders differs from the definition applied by the IRGC-RGF, which limits the understanding of stakeholders to “socially organised groups that are or will be affected by the outcome of the event or the activity from which the risk originates” (Renn

INTRODUCTION 19

2008a, 43; cf. also IRGC 2005, 49). In this definition the criteria of a certain degree of institu-tionalisation (‘socially organised’) and exposure to a certain risk are constitutive, whereas

“[o]ther groups, including the media, cultural elites and opinion leaders, the non-organised affected public and the non-organised observing public, all have a role to play in risk gov-ernance” (Renn 2008a, 43).

For the following analysis, the term stakeholder is understood applying the broader definition, which is not limited to organized and affected groups, as it allows for a more comprehensive picture to be included in the risk governance process and as, especially, even non-affected groups like the media may assert a high degree of influence on the perception of risks by other stakeholder groups.

To understand the emergence of the IRGC-RGF, the next chapter will briefly shed light on previous attempts to analyze and manage risks.

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2 THE THEORETICAL FRAMEWORK OF RISK ANALYSIS

The chapter starts by giving an overview on traditional risk analysis concepts and those used specifically for bioenergy.

2.1 Traditional concepts of risk analysis: between realistic and constructivist approaches

Dealing with risks is not a new endeavor. However, the major precondition for risk analysis and management was the shift from accepting risks as an uncontrollable fate to perceiving risks as something people can – at least to some extent – control (cf. Mun 2004, 1, 11-2). Hence, with the development of human knowledge, an increasing trust in technical capacities as well as in the internal locus of control, analyzing risks for extracting options to manage them, has become a more and more essential part of shaping our present and future. Con-sequently, tools for analyzing and managing risks are continuously objects of analysis and improvement. The IRGC-RGF is a step in this process and thereby a critique of traditional approaches of risk analysis frameworks of various disciplines.

Traditionally, risk analysis frameworks, especially from a technical or natural science pers-pective, follow a rather sequential logic of consecutive steps which aim at gathering and transmitting as much information as possible between those steps by applying predominantly quantitative methods (cf. Cox 2002, 6, 10; Mun 2004; Renn 2008b, 63). The sequence starts with identifying hazards, continues with quantitative risk assessments which try to calculate the magnitude of a risk once the target is exposed to a certain hazard, followed by exposure assessments, i.e. to quantify how many targets, e.g. people, are affected, and a risk charac-terization. The risk characterization combines the probabilities that a risk will occur with the severity of losses and sheds light on remaining uncertainties (cf. Cox 2002, 6-7). The result of such a rather technical process is a set of probability-consequence combinations in terms of objectively verifiable data (cf. Renn 2008b, 52, 63). Generally, this process is expert-driven (cf. Cox 2002, 6), aiming at gathering all relevant information and data, which are then con-densed into probabilistic summaries to enable risk managers to take appropriate decisions to control risks and hazards (cf. ibid., 7; Renn & Schweizer et al. 2007, 27-9). In this concept, stakeholders are rather perceived as passive recipients of information. The main issue of concern is to avoid unwanted reactions on certain risk related information (cf. Cox 2002, 6-7).4

Contrary to this approach, risk analysis within disciplines such as economics, psychology or social sciences focus on the individual or on social groups (cf. Renn 2008b) rather than on objectively verifiable physical harm and calculated probabilities. Thereby, these concepts amplify “the horizon of risk outcomes by referring to ‘socially constructed’ or ‘socially me-diated’ realities” (ibid., 63). They analyze among others:

− how individuals or groups take decisions on the acceptability of risks (economics),

− why and how they frame certain issues as risks, and if once judged as a risk, how these actors perceive this particular risk (psychology), and

4 A similar picture is given for e.g. early risk management at the European level by De Marchi (2003, 173). For limits and strengths of technical risk analysis and management, see Renn & Schweizer et al. (2007, 31-5).

THE THEORETICAL FRAMEWORK OF RISK ANALYSIS 21

− how people react to certain risks, how they judge the (un-)desirability of risks and how this process is influenced by “individual preferences, social context variables, and the cul-tural affiliation of the respective social group” (ibid., 63) (social science), thereby integrat-ing a constructivist perspective.5

2.2 Risk analysis of biofuels

Regarding the risk analysis of biofuels, no systematic theoretical approach prevails. Ap-proaches to identify risks and hazards generally focus on specific areas. There is an abun-dant range of studies on impacts and risks caused by biofuels,6 especially on the environ-ment, with a particular focus on conducting life cycle analysis (LCA) for specific impact cate-gories, most importantly energy balances and GHG (cf. Achten et al. 2008; see for related studies e.g. Beer et al. 2001; http://www.ecoinvent.ch/; IFEU 2007; Kammen et al. 2008; Zah et al. 2007) or covering areas such as economic feasibility (cf. e.g. Löhr 2006) or technical issues (cf. e.g. Hall et al. 1994). Others aim at integrating social and environmental impact studies (e.g. TERI project for India) or provide an ecological, economic and technical analy-sis without a clear focus on risk assessment or management (cf. e.g. Hartmann & Kaltschmitt 2002). Further approaches are being developed like the Energy Biosciences Institute (EBI), a rather recent research project funded by the company BP at the University of Berkeley with the aim to develop technical solutions to produce biofuels but also promises to study “the social and economic impacts of transitioning to sustainable energy” (EBI Website, 10.5.09). Secondly, the Food and Agriculture Organzation (FAO) aims at establishing an analytical framework for bioenergy and food security as well as a bioenergy impact analysis and will further work on the aggregate environmental impacts (cf. FAO 2008, 69). Considering the broader picture of energy risk management, there are certain approaches that deserve attention: One of them appraises risks by systematically analyzing the value chain from ex-ploration and production to distribution and sales. Risks, in terms of economic, regulatory / political and technological risks are assessed along the value chain, and generic risk man-agement tools are proposed (GARP 2009). However, the GARP tool is a very narrow ap-proach closely focusing on the technological and commercial process of energy generation and commercialization and the risks threatening it as such, without taking into account further risks caused by this process.

It is concluded that the risk analysis and management tools presented above, follow a very narrow approach in two senses: either by focusing on only one or two dimensions of sustai-nability (i.e. on environmental risks) or by being limited to one discipline (e.g. psychology).

5 The term ‚constructivist‘ – in contrast to ‚realistic‘ − refers to a concept that the human perception of ‚reality‘ is shaped by individual and social factors, like values, experience or believes. Hence, there is no single, objective ‚reality‘ but pluralities of perceptions (cf. Reich 2001, 356-7). 6 A first inquiry on http://www.sciencedirect.com resulted in almost 2,000 hits and on http://scholar.google.de/ in more than 15,000 related articles and hits for the key words “risk & analysis & biofuels”.

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2.3 The IRGC risk governance framework – towards comprehensive risk governance7

The IRGC Risk Governance Framework (IRGC-RGF), developed mainly by Renn, tries to give a more comprehensive theoretical approach for dealing with globally relevant risks (see chapter 1.2). Its aim is to

“establish a comprehensive and consistent yet flexible prototype analytic framework and unified set of guidance for improved risk governance [targeting in medium-term also] risk practitioners outside of the IRGC in their daily efforts to identify, assess, manage and monitor risk” (IRGC 2005, 17-8).

Yet it is noted that providing a risk governance manual is beyond the IRGC’s scope and in-tention (cf. Renn & Walker 2008, 337; Warner North 2008, 93-5).

The IRGC-RGF is comprehensive in two ways: firstly, it integrates knowledge about risk analysis from various disciplines like technical risk analysis for assessing e.g. physical harm, insights from psychology on the subjective processing of risk information, from economics the notion of utility for analysing the acceptability of a risk or selecting between different management options, and, last but not least, from social sciences, the need to conduct a “diagnosis of concerns, expectations, and worries that individuals, groups, or cultures may associate with a hazard or the cause of a hazard” (Renn 2008c, 202).8 Thereby it links physi-cal and socio-cultural aspects of risks under the assumption that “Context matters” (Renn 2008b, 64; cf. Renn & Walker 2008, 332). Secondly, the IRGC-RGF intends to be compre-hensive in the sense that it offers a “means of integrating risk identification, assessment, management, and communication“ (Renn 2008c, 201), thus, broadening the conventional trias of risk analysis, i.e. assessment, management, communication (cf. Renn & Walker 2008, 334). For this purpose, the IRGC-RGF does not only provide tools for analyzing risks; it follows a multi-stakeholder approach on two levels: on the level of analysis, it looks at the risk governance process itself, analyzing the various actors / stakeholders involved as well as their interaction and perception patterns (cf. Renn 2008a, 3, 10). On the normative level, the IRGC-RGF gives guidance on how to realize an inclusive governance process aiming at a fruitful inclusion of all relevant stakeholders. In this regard, the IRGC-RGF pays special attention to risk communication at all levels of the risk governance cycle. The necessity for this comprehensive approach is derived from the fact that risk analysis is not a value-free process of collecting data, but individual values, perceptions and preferences influence this process and shape its outcome (cf. Renn 2008b, 52). Additionally, the IRGC-RGF is com-prehensive in terms of considering risks from various areas of sustainability, i.e. it is not li-mited to environmental, economic or social risks.9

The IRGC-RGF consists of the four stages: pre-assessment, appraisal, characterization and evaluation, management as well as one cross-cutting task: communication and stakeholder

7 Note that the following sections do not only build on the original IRGC-RGF (IRGC 2005) but take into account also updates issued by its main author (e.g. Renn 2008a). 8 See for risk concepts & analysis approaches of various disciplines: Renn 1980, Vol. I, 22-55; Renn 2008b; Renn & Schweizer et al. 2007, 34-62; for integrative approaches: Renn 2008c, 196-204. 9 There is an abundant literature about economic or environmental risk assessment & management, which could not have been taken into account here (e.g. Paustenbach 1989; Suter 1993; Wilson 1991 for environmental risk management). Although these specific approaches are valuable and important, the strengths of the IRGC-RGF lie in integrating not only disciplines but also risks from different spheres.


involvement. These stages can be assigned to the two components of risk governance, which are, firstly, risk assessment, i.e. generating knowledge about risks in terms of types, probability and intensity of consequences, and, secondly, risk management, i.e. creating pre-ventive and reactive management options to deal with risks (see Figure 1) (cf. Renn 2008a, 8-9).

Yet risk governance is more than the sum of the two components (cf. ibid., 6, 10). It further-more integrates the perspectives of different stakeholders, their structures and interactions as well as ‘soft facts’ relevant for decision-making and implementation like social and cultural norms, political culture or organisational capacities (cf. ibid., 10, 24).

Figure 1 IRGC-RGF cycle: The different stages of the IRGC-RGF are characterized in the following

chapters [Source:http://www.irgc.org/The-IRGC-risk-governance-framework,82.html (access: 2.4.09)].

2.3.1 Pre-Assessment

Pre-Assessment includes the components of problem framing, early warning as well as risk and hazard screening. Problem framing refers to the task of identifying the different perspec-tives of official agencies, risk producers and those affected by risks as well as interested third parties on how the issue is conceptualized. Following a constructivist notion, there is not au-tomatically a consensus about what is treated as a risk and what is not. Several reasons for dissent might occur: actors do not agree on the goals of the selection rule of risks, they do not agree on the evidence or they rather do not consider something as a risk but as fate (cf. ibid., 11-2, 14). While early warning refers to a systematic search for new hazards, screening aims at revealing existing procedures for hazards and risk identification and analysis (cf. ib-id., 15).

2.3.2 Appraisal

Appraisal combines risk assessment and concern assessment with the aim to generate

“knowledge linking specific risk agents with uncertain but possible consequences [...] and an estimation of the risk in terms of a probability distribution of the modelled conse-quences” (ibid., 14).

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Risk assessment here means to identify and, wherever possible, estimate hazards, assess the degree of exposure and vulnerability, and as a combination of these steps, estimate the risk (cf. ibid., 14, 18). In order to realize this task, different forms of probability-based me-thods can be applied (cf. ibid., 16). Consequently, as the future is not predictable, a degree of uncertainty will remain. Accordingly, these uncertainties need to be depicted as well. The IRGC-RGF proposes two different categories of uncertainty: a) epistemic uncertainty, which can be overcome by an increased research effort, and b) aleatory uncertainty, which is not research-responsive (cf. ibid., 16-7). Additionally, risk assessment is confronted with the challenges of complexity and ambiguity. Complexity is given as cause-effect links between risk agents and their potential consequences are often difficult to identify among a multitude of options. Secondly, even if identified, they are hard to quantify (cf. ibid., 19; Renn 2008c, 202). Ambiguity pays special attention to the notion of a risk being a mental construct, as it describes the phenomena of different interpretations of the same results of a risk assess-ment (interpretative ambiguity) or of the questioning whether results are tolerable or not (normative ambiguity) (cf. ibid., 20; Renn 2008c, 202). The importance of stakeholders’ con-cerns regarding risks is a crucial element of the IRGC-RGF, as an assessment of only physi-cal harm is deemed to be insufficient (cf. Rohrmann & Renn 2000, 17, 42). The integration of public perception allows for triggering further risk assessments as a broader view on risks is included (cf. Renn & Walker 2008, 333). Therefore, the risk assessment is complemented by a concern assessment. It aims to “identify and analyse the issues that individuals or society as a whole link with a certain risk” (Renn 2008a, 25). The IRGC-RGF proposes semantic risk patterns for categorizing perceptions as well as perception patterns linking probabilities and risks (cf. ibid., 22-3).10 The relevance of concern assessment is given as risks can lead to secondary effects by their social amplification (cf. Renn 2008c, 196-7; Rohrmann & Renn 2000, 38-40), implying that

“events pertaining to hazards interact with psychological, social, institutional, and cultural processes in ways that can heighten or attenuate individual or social perceptions of risk and shape risk behavior. Behavioural patterns, in turn, generate secondary social or eco-nomic consequences that extend far beyond direct harm to human health or the environ-ment [and] can trigger demands for additional institutional responses and protective ac-tions” (Renn 2008a, 25).

Concluding, while framing in the stage of pre-assessment generally analyzes, WHAT is se-lected as a risk and why there are cases of dissent, concern assessment looks deeper at the risks identified and analyzes HOW they are perceived.

2.3.3 Risk characterization and evaluation

The stage of risk characterization and evaluation integrates the findings of risk and concern assessment with the aim to judge the tolerability or acceptability of a certain risk. Thereby, a tolerable action is seen worth pursuing as benefits are rated higher than negative conse-quences, but risk reduction measures (e.g. reducing vulnerability / exposure) are deemed necessary. Acceptable actions lead to a situation where risks caused are evaluated to be of

10 For description of semantic risk patterns, also called semantic images of risk perception, see Renn 2008b, 55-6.


minor importance and therefore do not require additional treatment (cf. Renn 2007 16 / 2008a, 31). However, judging a risk as tolerable or acceptable is confronted with situations in which − implied values to reach this kind of judgement are heavily disputed leading to normative

ambiguity (cf. Renn 2008a, 29-30) or − risk interpretations differ due to ambiguous scientific evidence (interpretative ambiguity)

(cf. ibid., 30) or − values as well as evidence are contended at the same time (normative & interpretative

ambiguity) (cf. ibid., 30).

Therefore, the IRGC-RGF divides this stage into two parts: the first making evidence based judgments on the tolerability / acceptability of a risk (risk characterization), the other one giv-ing value based insights into this judgement (risk evaluation). Risk characterization implies to estimate risks, describe remaining uncertainties, and to assess them against the following criteria:

− inter-target variations and potentials for equity violations, − compatibility with legal requirements, − risk-risk comparisons and -tradeoffs, − discrepancies between risk assessment and perceptions (cf. ibid., 31, 33).

In case tolerability or acceptability is disputed, risk evaluation supports the tolerability / ac-ceptability judgment by analyzing

“pre-risk aspects such as choice of technology, social need for the specific risk agent (substitution possible?), risk-benefit balances, political priorities, potential for conflict reso-lution and social mobilization potential” (ibid., 31).

This implies that a risk situation can be judged as intolerable, i.e. unacceptable, at all.

2.3.4 Risk management

Risk management finally, in an ideal RGF as an integration of all previous stages, has to develop options from a set of generic risk management options, namely, risk avoidance, risk reduction, risk transfer or self retention, to deal with three types of risk situations: − acceptable situations, in which, as said before, risk reduction options are not deemed as

necessary but might be taken up on a voluntary basis (cf. ibid., 32); − tolerable situations, in which risks need to be reduced as far as reasonable by private

and / or public actors (cf. ibid., 32); − intolerable situations, which require renouncing the risk source as a preventive measure,

or, in case this is not possible, minimize vulnerabilities and exposure (cf. ibid., 32).

However, generating risk management options is just one step, as all options require as-sessment against a set of predefined, pre-weighted criteria, such as: effectiveness, efficien-cy, minimization of external side effects, sustainability, fairness / equity, political and regula-tory feasibility, as well as ethical and public acceptability (cf. ibid., 34-5).

Out of a remaining set of assessed, approved and evaluated management options, best-solution options need to be selected, implemented and monitored (cf. ibid., 35). Based on the findings of previous stages regarding the complexity, ambiguity or uncertainty of risks, the

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IRGC-RGF proposes generic risk management strategies for these risk classes (cf. ibid., 36-40), focusing on and clearly differentiating between options for risk agents / sources as well as risk absorbing systems (cf. Renn & Walker 2008, 338-9).

2.3.5 Stakeholder involvement and participation, risk communication

The involvement and participation of various stakeholders as well as risk communication are crucial elements of each stage reaching from the selection of stakeholders for the pre-assessment to the selection of managing options and their communication, therefore being a cross-cutting issue to ensure inclusive governance (cf. Renn 2007, 45). The IRGC-RGF ar-gues that through stakeholder involvement and participation, an enriched set of management options can be generated, that “fairer and socially and culturally more adaptive and balanced judgements” (Renn 2008a, 45) can be made, and the result of such an inclusive risk gover-nance process will be more effective, efficient, legitimate, fair as well as more publicly and ethically accepted (cf. ibid., 45). According to the generic risk management strategies for risks with a high degree of complexity, uncertainty and ambiguity, the IRGC-RGF also pro-poses generic strategies for stakeholder participation. With regard to communication, the IRGC-RGF argues that its purpose is to bridge existing gaps between a) different stakeholders’ perceptions, as well as between b) their perceptions and the resulting risk assessment outcomes and management options throughout the entire risk governance process. These gaps are generated by differing knowledge and understand-ings of laypersons and experts or of experts from various disciplines. Therefore, communica-tion does not only serve the purpose to provide mere information but to generate a joint un-derstanding by a mutual learning process, fostering acceptance or at least tolerance of the risk governance process, of the actors involved and of the outcomes generated (cf. ibid., 50-1). Other authors confirm the importance to integrate stakeholders’ knowledge and to over-come knowledge gaps between laypersons and experts, which require recognition and action by corporate risk managers, for sciencitific research alone could not reveal such a broad knowledge (cf. De Marchi 2003, 171). Further details on each of the stages will be given in the respective chapters and in the fol-lowing chapter 2.4. Lining up the various stages of the IRGC-RGF and looking at Figure 1 can lead to the conclusion that the IRGC-RGF follows a sequential logic, therefore it needs to be highlighted that

“the framework turns the established linear structure – in common with other contempo-rary conceptions of risk governance – into an open, cyclical, iterative, and interlinked process” (Renn 2008c, 202).

In practice, risk governance stages are often implemented in a varying order or parallel to each other and do not necessarily build on the findings of the previous stages or any syste-matic knowledge generation at all (cf. Renn 2008a, 8). This analysis will use the ideal cycle in order to follow a systematic approach. Deviation from the sequence will be highlighted.

2.4 Methodological approach

The IRGC-RGF itself already points at a broad range of methodological approaches to sup-port a systematic analysis of so called ‘hard facts’ of a risk / hazard (physical implications


etc.) as well as of ‘soft facts’ (like perceptions, concerns of stakeholders) to be carried out by a multi-disciplinary research and risk managers’ team involving a broad range of data and stakeholders. Due to the fact that the variety of approaches leaves room for choosing appro-priate means and due to the limited scope of this master thesis, one needs to be selective regarding the feasibility of methods applied. The aim of this thesis is to combine the analysis of subjective perceptions of risks regarding large-scale biodiesel production from Jatropha (following the understanding of risk as a mental construct), with a more ‘fact oriented’ analy-sis of hazards and risk probabilities. Consequently, the following methods have been chosen:

In the stage of risk pre-assessment, the analysis builds on guided interviews with experts of different stakeholder groups, which have been carried out in India in January 2009 (see An-nex 1 List of interviews in India carried out in January 2009). Expert interviews, as one form of guided interviews in a qualitative research design, serve the purpose of extracting informa-tion from the respective resource person in its function as an expert in a defined area. There-fore, the interview guide is of high importance to have the interviewee focused on the topic at stake (cf. Flick 2004, 139). It must contain a predefined set of rather open questions, which can be asked in a different order as well as being left out in case a question has already been answered in the course of the interview. This approach is based on the assumption that a more rigid approach, i.e. a fixed order of narrow questions used in a questionnaire, limits the possibility to gain a more in-depth insight into the views and opinions of the interviewee (cf. ibid., 117, 143). The aim of guided expert interviews in general is to evaluate and com-pare the content of expert knowledge (cf. ibid., 141); in this case they also aim at comparing risk perceptions and knowledge about hazards.11

For risk pre-assessment, each interviewee has been asked the following questions:

− What are, from your point of view, the key negative or positive consequences (risks) if you look at the current stage of Jatropha cultivation for the bio diesel production on the economic / environmental / social level?

− Why do you think these consequences are central for the debate about Jatropha produc-tion in India?

In order to broaden the empirical analysis, all interviewees were asked questions about their perception of public opinion:

− Are you aware of any public concerns regarding large-scale Jatropha cultivation?

− If yes, how or by whom, do you think, are these concerns or perceptions influenced?

Furthermore, a qualitative content analysis (QCA) of national policy plans on biofuels, written government statements as well as written statements by other key stakeholders (companies, farmers, environmentalists, social organisations etc.), which reflect their opinion about JBD production, will be conducted. Additionally, recent news and articles (2007/8) in Indian press

11 Additionally, those stakeholders who have not been available for a personal interview have been asked to an-swer in writing a questionnaire including the same questions applied in the interviews, being aware of the limita-tions of such an approach compared to guided oral expert interviews. Additionally, some of the interviewees wanted to remain anonymous and not to be quoted. Hence, the attached list in some cases lacks detailed infor-mation about the interviewee. The information provided in these interviews is included as background information in this thesis.

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are analyzed to capture the current view of the media, and to analyze a source of possible influence on public opinion in India. The analysis is focused on press sources published in English, ignoring the broad variety of e.g. newspapers published in the different regional lan-guages of India. Being aware of the abundant range of non-English media, only an extract of media coverage can be presented with a focus, firstly, on newspapers with a high circulation, print and online accessibility and national coverage and, secondly, on business magazines in order to take into account a business oriented perspective. Press sources have been ac-cessed via the database LexisNexis.12 The following sources have been selected:

− Hindustan Times, being among the biggest newspapers with a daily circulation (together with the Hindi Version ‘Hindustan’) of 2.25 Mio copies and a readership of 12.4 Mio.13

− India Today, a weekly magazine with a circulation of 1.1 Mio / week and an estimated readership of approx. 15 Mio people, published in five languages.14

− Business Today, since its inception in 1992, the fortnightly magazine occupies the posi-tion of most or second most circulated business magazine in India (BSG Asia 2004, 16).15

− MINT, a daily business newspaper (except Sundays) with a circulation of 80,000, that started operating in 2007 as a Joint Venture (JV) between the publishing house of Hin-dustan Times and The Wall Street Journal’.16

The QCA will screen the sources mentioned before (interviews, documents and articles) re-garding two research questions:

− Which risks (in the sense of positive as well as negative consequences) are associated with a large-scale production of biodiesel from Jatropha in India?

− How are these risks perceived?

A content analysis “entails a systematic reading of a body of texts, images and symbolic mat-ter” (Krippendorff 2004, 3). In this case, a qualitative approach is preferred over a frequency analysis from quantitative content analysis, as the aim is to capture the holistic meaning of the material analyzed, to show and interpret general patterns of media coverage of the issue at stake and to extract the aspects that are associated with it (cf. Miell & Wetherell 1998, 246). Therefore, the QCA approach of Mayring is applied (cf. Lamnek 2005, 517 et sqq.), 17 which neglects predefining theoretical categories in favor of a screening of the material to be analyzed in a first step, followed by the definition of a general research question and, thirdly, a further selection of paraphrases, which are fourthly reduced and generalized to reach at abstracted statements pertaining to a specific frame.18

12 Those articles have been selected via a database search in LexisNexis carried out in February 2009, which fulfilled the criteria of at least two hits for the key word ‘biodiesel’ or at least one hit for ‘Jatropha’. 13 Cf. http://www.htmedia.in/Section.aspx?Page=Page-HTMedia-AboutUs [access: 4.2.09] 14 Cf. http://indiatoday.intoday.in/ [access: 2.2.09]. 15 http://www.indiatodaygroup.com/new-site/publications/bt-about.html [access: 2.2.09]. 16Cf.http://newsblaze.com/story/2007020112224600001.pz/topstory.html;see also http://www.livemint.com/Lounge.aspx [access of both: 2.2.09]. 17 For a detailed overview on the approach, see Lamnek (2005, 517-531). 18 The term ‘frame’ traces back to Goffman who claimed that all social experiences are organised within frames to individually allocate and structure subjective understandings of a situation (cf. Oliver & Johnston 2000).


Doing this, one has to keep in mind the need for reflexivity, i.e. to be

“constantly aware throughout the research process of the assumptions, social knowledge and preconceptions that are being drawn upon in conducting the analysis, and of the pos-sible impact these may have on the construction of research findings” (Miell & Wetherell 1998, 245).

Regarding the analysis of existing risk and hazard screening procedures, the approach is twofold: Firstly, corresponding to the affiliation of the interviewee to certain stakeholder groups, questions on risk assessment and management strategies have been asked, like in the case of companies:

− Which steps did your company undertake to assess risks and benefits (for your company / the environment / the society) at the initial stage of this business?

− Which management steps or strategies have been implemented until now to avoid, re-duce or monitor potential risks (for your company / the environment / the society)? Are there any new measures foreseen in the future?

Secondly, this step will be complemented by information gathered from a literature research. Already at this stage, information for the Functional System Analysis (FSA) is collected.

The second stage of risk appraisal, combining scientific risk and concern assessment, will be introduced by the conduction of a FSA in order to further analyze the system, in which the large-scale JBD production is ‘operating’, and to allow for generating projections on its future development. The analysis assumes that there is a set of variables, labeled as dependent, independent and intervening variables.19 In order not to present only a static risk picture but also a dynamic one, which sheds light on the variables that influence the development, scope, probabilities and pace of risks now and in the nearer future, the FSA will be comple-mented by systemic scenario construction (SSC). This need is created by the IRGC-RGF as it deals with systemic risks. Systemic risks have been defined (see chapter 1.2) as being embedded in a complex, i.e. changing, context of socio-political, ecological and economic impacts and as being closely linked to other risks (cf. Renn 2008a, 6, 9). Secondly, the need to conduct a SSC is derived from the fact – as will be analyzed below – that large-scale JBD production in India is still in an evolving and, thus, alterable phase. SSC is applied in cases with uncertain long-term effects as in the case at stake that embraces a set of uncertain long-term effects on the ecological, socio-political and economic level. SSC is also utilized if causal processes and decision-points need to be detected. SSC not only delivers results, i.e. consistent, plausible scenarios and insights into interactions between system components, as a basis for further decision-making, but it integrates knowledge from various disciplines, and is thereby in line with the basic concept of the IRGC-RGF, which also emphasizes the need for

19 Independent variables are those variables considered to determine to a large extend the ‘outcome’, the de-pending variable, while intervening variables influence the pace or scope of the development of the dependent variable. Dependent variables, finally, reflect the consequences of the above mentioned variables, in this case the creation or transformation of risks and opportunities of large-scale Jatropha cultivation for biodiesel generation in India. In the case of qualitative system analysis, there are also other modes of analyzing and labeling variables, e.g. Wiek et al. (cf. 2007, 989-990) identify from a functional perspective four categories of variables, which are: focus variables, target variables, context variables and action variables. However, these categories show sub-stantial overlap with the groups of variables mentioned.

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“analytical – largely probability based – methods […]. Probabilistic risk assessment for large technological systems, for instance, include tools such as [...] scenario techniques” (ibid., 16).

The FSA consists of a sequential procedure. To start, system variables need to be identified. This requires to define the system by its boundaries (cf. Wiek & Lang 2008, 54), to apply a qualitative system analysis (QSA), and to identify and define its variables (cf. ibid., 30). Addi-tionally, variables need to be grouped according to their quality as dependent, independent or intervening variable, by analyzing interactions between them in a second step (cf. ibid., 20). QSA furthermore includes the task of analyzing the “structures and dynamic potentials of the system” (ibid., 20). These steps are done based on a literature research, applying gener-ic sub-systems variables and the knowledge gained in expert interviews. Furthermore, in order to obtain a manageable set of variables, variables found need to be screened on the basis of the following indicators:

− adequacy (indicators: relevance for the research question and accuracy of definition) (cf. Wiek et al. 2007, 990; Wiek & Lang 2008, 18).

− sufficiency (indicators: formal, thematic and relational sufficiency) (cf. Wiek et al. 2007, 990; Wiek & Lang 2008, 18).

To analyze the interactions between the resulting variables, a unidirectional impact assess-ment for each of the variables is used. Generally, a three digit approach is recommended (cf. Wiek et al. 2007, 990). Due to the characteristics of the applied software, it will be amended to a four digit scale ranging from ‘3’ meaning ‘strong impact’ down to ‘0’ meaning ‘no impact’. With the help of this analysis, it can be deduced how strong one variable influences the other (activity), whereby it can be judged as a independent variable, or it can be deduced how strongly it is affected by other variables (passivity) and can thus be clustered among the de-pendent variables, or whether it has an ambivalent role in the system as intervening variable.

As foreseeen in the stage of risk assessment, future developments then need to be extrapo-lated to give insights into probabilities and scope of risks, supported by scientific expertise in order to forecast how certain risks might develop in the future. Gaining this insight will help mapping out and assessing management options (cf. Wiek & Lang 2008, 27). This is done by building on the variables derived from the QSA. For each of the variables possible future projections will be identified (cf. ibid., 30), building on available expert knowledge or applying generic development pathways (e.g. growth, stagnation, decrease). Additionally, Wiek & Lang (cf. 2008, 44) deem the following approaches as legitimate sources for developing pro-jections: transfer of data and trends from similar systems, applying inherent logic due to path dependencies or an intuitive approach applied by experts and stakeholders. Secondly, pro-jections need to be tested against their mutual consistency in order to create a limited set of scenarios. Scenarios are understood as combinations of varying future projections with a high degree of consistency (cf. ibid., 30-1). Consistency refers to the degree of compatibility between projections of one set. Therefore, projections will be checked using a consistency matrix applying a conventional scale for consistency analysis (cf. ibid., 45; see Table 2).

The scenario selection will be executed based on the degree of consistency and diversity of scenarios. As stipulated by the FSA approach, they will be ‘re-composed’ by an interpretation


of the results of scenario analysis (cf. ibid., 47-8). The entire process will be supported by using scenario software. The entire process of the FSA will allow for a judgement on the de-velopment of risks linked to large-scale Jatropha production in the near future.

Table 2 Consistency scale for projections (Source: Own table based on Wiek & Lang 2008, 45.)

Type of Relation

Description

(P = Projection)

Consistency Value

Conditional The occurrence of P1 requires or causes the occurrence of P2.

2

Supportive The occurrence of P1 avails the occurrence of P2. 1

Independent The occurrence of P1 does not affect the occurrence of P2. 0

Obstructive The occurrence of P1 hinders the occurrence of P2 (weak inconsistency).

-1

Contradictory The occurrence of P1 makes the occurrence of P2 impossi-ble (strong inconsistency).

-2

Subsequently, the risks identified in the pre-assessment will be assessed against a set of indicators and based on insights gained from scientific literature and from the expert inter-views. The indicator set will be included in a standardized risk assessment protocol (RAP), composed of the criteria included in Table 3.

Table 3 Indicator set for the risk assessment protocols (Source: Own table based on Renn 2008a, 18 et sqq) Hazard identifica-tion & estimation

Exposure / vulnerabili-ty assess-ment

Level of complexi-ty

Type of uncertainty

Type of ambiguity

Probabili-ty of risk

Cause-effect rela-tion

Exposure pathways

Ordinal scale ap-plied

Epistemic uncer-tainty: target va-riability, modeling errors

Normative Under scenario 1

Properties, persis-tence, irreversibili-ty, ubiquity, de-layed effects, po-tency for harm

Target behavior, target vul-nerability

Aleatory uncer-tainty: random events, system bounda-ries, non-knowlegde

Interpreta-tive

Under scenario n

Dose-response relationships

32 JANA LATSCHAN

The aim of the RAPs is to reach at a comprehensive overview on the risk properties and to judge whether risks are complex, ambiguous or uncertain. Tchankova (cf. 2002, 290-1) stresses the need for a comprehensive risk identification and problem description. Thus, the stages of pre-assessment and risk characterization will assume a major role in chapter 4 to avoid leaving important risks unidentified.

Furthermore, the IRGC-RGF proposes – based on secondary studies – different sets of indi-cators for the concern assessment (cf. Renn 2008a, 26-7), which show some overlapping among each other, but also with risk assessment indicators. Therefore, a combination of these sets is applied. Rohrmann & Renn (cf. 2000, 26) propose for certain risk perception influencing factors, which can be linked to the indicators mentioned before, directions of in-fluence, which will be taken into account as well (see Table 4). As no surveys exists on pub-lic opinion in India about biofuels and international risk perception analysis is generally scarce for Asian countries (cf. ibid., 20), the thesis relies on the insights from expert inter-views and the evaluation of oral and written statements of key target groups. Furthermore, risks will be linked to semantic risk patterns (see Table 4) that are characteristic for their risk perception and give a hint to whether risks tend to be under- or overestimated (cf. Renn 2008a, 22; 2008b, 55-6).

Table 4 Indicator set for the concern assessment (Source: Own table based on Renn 2008a, 22, 26-7;

2008c, 200; Rohrmann & Renn 2000, 21-6)

Concern assessment indica-tors

Direction of Influence Semantic risk pat-terns

Perception of familiarity & knowledge about the hazard

⇒ increase of risk tolerance

Risks as:

− immediate threat

− twist of fate

− challenge to one’s own strength

− gamble

− early indication of insidious danger

Inequity / injustice associated with risk & benefit distribution

⇒ depending on individual utili-ty, strong incentive for risk rejec-tion

Perception of fear / dread due to risk

⇒ risk tolerance decrease

Perception and trust in per-sonal / institutional control over risk management

⇒ personal control: risk toler-ance increased, institutional control depending on trust

Potential for social mobiliza-tion

---

Benefit evaluation (Society / individual)

⇒ depending on individual utili-ty, strong incentive for risk ac-ceptance


Furthermore, intuitive biases of risk perception need to be considered. Rohrmann & Renn (cf. 2007, 25) and Renn (cf. 2007a, 25) define different sets of biases. Table 5 summarizes the biases taken into account in this research. Table 5 Intuitive biases of risk perception (Source: Own table based on Renn 1980, Vol. II, 35; Rohr-

mann & Renn 2000, 25)

Type Description

Availability bias The easier & faster a risk is recognized, the higher the chance for overestimation

Anchoring effect The more a risk is associated with something known, the higher the chance for overestimation

Risk distribution over time

“The more constant and similar losses from risk sources, the more likely the impact of average losses will be underestimated” (Renn 2007, 25).

Risk characterization and evaluation, as the third stage, are based on the findings of the pre-vious stages and their integration (cf. Renn 2008a, 28). The first step of risk characterization will give an evidence-based idea of what is/might be seen as tolerable. The risks identified and analyzed in the chapters 4.1 and 4.2 will be assessed against the criteria specified in the section on risk characterization in chapter 2.3. In addition to risk characterization, risk evalua-tion deals with value-based components for a judgement on the (in-)tolerability / acceptability of risks by key stakeholders. Based on a general overview of political priorities in India re-garding sustainable development, the analysis will address the risk evaluation criteria (cf. Renn 2008a, 31) as stipulated in chapter 2.3. To judge risks or benefit (agents) as better or worse, the sustainability criteria laid out at the beginning will support this step. To integrate all findings, identified risks will be applied to the IRGC traffic light diagram (Figure 2).

34 JANA LATSCHAN

Figure 2 Traffic light mode (Source: Figure based on IRGC 2005, 37; Renn & Schweizer et al. 2007,

95-7).

In the following analysis, the approach for analyzing risk management, communication and stakeholder participation is twofold. Firstly, it will be highlighted which risk manage-ment, communication and stakeholder participation activities are already in place based on findings from interviews and literature research. Secondly, new management options will be generated and assessed not only regarding the criteria set by the IRGC-RGF (see chapter 2.3) but also the criteria specified for sustainable energy from biofuels (see chapter 1.2). This stage will be based on the generic risk management options proposed by the IRGC-RGF for simplicity, complexity, uncertainty or ambiguity induced risks. It will include options for com-munication and stakeholder participation (see Table 6) and test their suitability for the re-search issue. Furthermore, management options will build on the information gathered for previous stages. To assess and compare risk management options, a simplified adaptation of the analytical decision making process (ADMP) as laid out by Renn & Schweizer et al. (cf. 2007, 100-7) will be applied comprising seven steps: 1) choice of assessment criteria (see above); 2) genera-tion of management options; 3) assessment of probability and extent of impact of the option on each criteria and 4) impact on utility by each option (steps 3 and 4 will be integrated here and assessed by applying a scale from ‘-2’ (strong negative impact) to ‘+2’ (strong positive impact)); 5) definition of minimum thresholds for each criterion; 6) evaluation of each crite-rion, by multiplying its value; and 7) aggregation of result for each criterion and option by summing them up. Integrated in chapter 5, it will be sketched how stakeholder participation and communication should be integrated. For this purpose, the IRGC-RGF proposes to apply its Risk Manage-ment Escalator, which proposes generic discourse20 strategies (see Table 6) depending on different risk classes (i.e. a simple risk in this sense would only require an instrumental dis-

20 The term ‚discourse‘ is used in this thesis in a narrow understanding of a debate or similar types of communica-tive interaction between different actors relevant for the JBD business.


course targeting mainly the agency staff). Although it is argued in the IRGC-RGF that risks, in an ex-ante perspective, must be allocated to these different risk classes to define already “different routes of appraisal, characterisation, evaluation and management” (Renn 2008a, 48), this is done in the present analysis ex post as part of the management options to check, whether management strategies including discourse and stakeholder participation strategies proposed by the IRGC-RGF (see Table 6) are adequate for the tested case. Due to the nature of this analysis, this stage remains limited to generating and assessing management options, as their implementation and monitoring is beyond the scope of this thesis. Before starting to apply the IRGC-RGF and the methological tools explained above, the next chapter will outline the national policy as well as the legal, competitive and economic envi-ronment in which JBD companies operate and which influence the emergence of risks. Table 6 IRGC-RGF risk management and stakeholder involvement escalator (Source: Table adapted from IRGC 2005, 16; Renn 2008a, 37, 41.)

Stakeholders (Industry, directly affected groups)

External Experts External Experts External ExpertsAgency Staff Agency Staff Agency Staff Agency Staff

NormativeEvaluative & Cognitive Evaluative & Cognitive

Discourse Instrumental Epistemological Reflective Participative

Simple Complex Uncertain Ambiguous

IntolerableTolerableAcceptable risk reduction or sharing only on a voluntary basis

Risk evaluation

Man

agem

ent s

trat

egy

Conflict

Routine-based : tolerability / acceptability judgement: applying traditional decision making (risk benefit analysis etc.)risk reduction: trial & eror, technical standards, economic incentives; education, labelling, information; voluntary agreements

Resilience-focused (target) :Improving capability to cope with surprises: diversity of means to accomplish desired benefits; avoiding high vulnerability; allowing for flexible responses; preparedness for adaptation.

Discourse-based : Application of conflict resolution methods for reaching consensus or tolerance for risk evaluation results and management option selection: integration of stakeholder in reaching closure; emphasis on communication and social discourse

risk source to be abandoned / replaced or reduce vulnerability & restrict exposure

Risk target

Risk-informed (agent / causal chain) : Characterising the available evidence: expert consensus seeking tools (Delphi, Scenario etc.), results fed into routine operation

Robustness-focused (target) : Improving buffer capacity of risk target: additional safety factors, improving coping capacity, establishing high relaibility organisations, redundancy and diversity in designing safety devices

Precaution-based (agent) :Using hazard characteristics such as persistence, ubiquity, etc. as proxies for risk estimates; tools include: Containment, risk reduction as low as reaonably achievable / possible (ALARP), best available control technology (BACT)

Risk Class

Stakeholders (Industry, directly affected groups, general public)

Stak

ehol

der

part

icip

atio

n

Act

ors

Risk agent

risk source to be reduced with reasonable resource investment

36 JANA LATSCHAN

3 STATUS QUO & ENVIRONMENT OF JATROPHA BIODIESEL PRODUCTION IN INDIA

As explained before, risks caused by certain risk agents are not generated within a vacuum

but within a complex system, which determines or at least influences emanating risks. To

understand this system, those system variables need to be defined and described that are

judged as causing or at least substantially influencing risks. Yet firstly, it needs to be clear

which system is at stake by defining its boundaries. In the present analysis, the system at

stake is the production of Jatropha in India (spatial boundary) for the large-scale generation

of biodiesel (functional boundary) during the next five to ten years (temporal boundary). The

aim of the study is to detect present and future risks on the social, ecological and economic

level caused by large-scale biodiesel production from non-edible biomass, in this case Jatro-

pha. Variables will be grouped according to their affiliation to a specific societal sphere. So-

cietal spheres are selected in the style of spheres defined by Schaltegger & Petersen (cf.

2007a, 41, 56), who work out five spheres − the technological-scientific, the economic, the

legal, the social-cultural and sphere of pressure groups policy − and Jänicke (cf. 2007, 60-1),

who adds the sphere of environment. To reach this full picture of variables, firstly, surround-

ing conditions of JBD will be described and, secondly, information from expert interviews will

be further screened for relevant information. The results will be presented and assessed in

chapter 4.2.

3.0 The ‘system’ of Jatropha biodiesel generation in India

Jatropha is no new plant to India and has already been used for purposes such as soap pro-duction or medical applications (cf. FACT 2006, 33-4; FAO 2008, 68). Yet, the biodiesel sec-tor in India in general, and the Jatropha based biodiesel (JBD) production in particular is still in a nascent stage21 and a rather recent endeavor of the Indian government, only starting at the beginning of the new millennium. Structures and policies are not yet fully developed and many impacts of large-scale JBD are still to be researched. This chapter will shed light on the surrounding conditions for the emergence of the JBD issue in India and the current stage of value chain organisation patterns and regulations as well as policies relevant to it.

3.1 India’s energy demand situation and outlook

India’s need for energy is constantly increasing, and even though the current economic crisis might soften this development, the demand for energy will continue to grow (cf. Altenburg et al. 2009, 33). Already now, India is among the top-five energy consuming countries in the 21 Cf. Adholeya & Dadhich 2008, 11; Altenburg et al. 2009, 17. This impression has also been confirmed in many of the interviews, cf. Int. MB / Medors. Int. D1-BP Biofuels: in this case, large-scale production of JBD is sche-duled to start in 2010, whereas others argue, that the business needs at least three more years to take-off (cf. also Int. Growdiesel / Mercedes / NABARD).

STATUS QUO & ENVIRONMENT OF JATROPHA BIODIESEL PRODUCTION IN INDIA 37

world, with a total share of 3.24% (cf. Chandel et. al 2007, 360; Wagner 2007, 8-9), possibly taking a top-three position until 2030, if the government of India (GoI) keeps its aim to main-tain an average growth rate of approx. 8% p.a. for the next 15 to 25 years (cf. Adholeya & Dadhich 2008, 2). The need for crude oil imports has been particularly growing along the process of industrialisation and economic liberalisation since the 1990s: with an almost con-stant production of crude oil in India (between 1991 and 2005 at approx. 32 - 34 Mio t p.a.),

imports rose from 57.9 Mio t in 2000 to 100 Mio t in 2004/5 and to 111 Mio t in 2006/7 (cf. Altenburg et al. 2009, 33-4; Chandel et. al 2007, 360-1; Francis et al. 2005, 14). If India rea-lizes its annual 8% GDP growth target, commercial energy consumption will increase to 2,123 Mio t of Oil Equivalents by 2031/32 (cf. Adholeya & Dadhich 2008, 3). Thus, the gap between domestic production and imports is constantly widening, having a negative effect on the foreign exchange balance although the current decrease of crude oil prices (see Annex 4) brought some relief in this sense. Closing this gap is not only seen as a solution for the growing energy demand and bringing more energy security, but also as a must regarding India’s need to spare its foreign exchange reserves.

India as well as many international actors is thus putting large emphasis on the promotion of biofuels (bioethanol and biodiesel) to close this gap, as

“biofuels have a large potential to substitute for petroleum fuels. [And as] they can help the world achieve a more diversified and sustainable transportation system in the decades ahead” (FMFAC et al. 2006, 6).

“In conclusion, the biofuels industry is poised to make important contributions to meet In-dia’s energy needs by supplying clean, environmentally-friendly fuel” (Gonsalves 2006, 6).

However, India is still a small player on the international biofuel scene for both bioethanol and biodiesel (see Annex 3). The business of biodiesel production is still being dominated by European countries and companies (cf. Adholeya & Dadhich 2008, 1). Biodiesel produced in Europe and the USA is predominantly used within the countries of origin, not meant to be exported, also to meet the mandatory blending targets set in these two cases (cf. FAO 2008, 14, 29, 48-9). Furthermore, edible oils are the primary feedstock for biodiesel, not only in the EU and USA but also in countries like Malaysia or Indonesia. Understanding the case of In-dia’s choice for Tree Born Oil Seeds (TBOs), such as Jatropha seeds as an option for closing the energy demand-production gap, one has to keep in mind that India cannot afford spend-ing edible oils for this purpose (cf. Int. MNRE). India is already running short on edible oils (cf. Francis et al. 2005, 18; Gonsalves 2006, 22; MoIB 2009, 435-6) and almost half (44% in 2004/5) out of its approx. 10.8 Mio t of annual edible oil consumption (2004/5) is imported (cf. Ariyanchira 2005). Moreover, India has to find a solution reconciling energy with food securi-ty. Apart from the shortage in edible oils, India was already confronted in 2007/8 with the situation of food grain stocks below the buffer norm, i.e. the overall amount of stocked wheat and rice in this period was 4% lower than the required norm.22

22 “Food grain stock stood at 19.2 million tonnes as on January 1, 2008, [...]. This stock is 4% lower than the buf-fer norm of 20 Million tonnes. While wheat stock of 7.7 million tonnes is 500,000 tonnes lower than the required norm, the rice stock stood at 11.5 million tonnes that is 300,000 tonnes lower than the norm“ (Shiva 2008, 18).

38 JANA LATSCHAN

However, India has to look especially on how to satisfy its demand for diesel, which is five times higher than the demand for petrol (40 Mio t p.a.) (cf. Gonsalves 2006, 38; Kaushik et al. 2007, 302), whereas total fuel consumption amounts to 40% of India’s entire energy con-sumption with the transport sector being the second largest fuel consumer (cf. Shailesh 2009, 6). This demand will very likely continue increasing due to a constantly rising figure of individual transport means (two-wheelers, cars etc.) especially in urban areas like Delhi, Mumbai or Kolkata, contributing to an ever worsening air quality in these areas.23 Even though the ratio between vehicles and population is still low compared to industrialized coun-tries, the total number has risen sharply from 20 Mio vehicles in 1991 to 50 Mio in 2000 (cf. Francis et al. 2005, 13), and the share of road transportation means increases faster than other means of conveyance like rail transport or shipping (cf. ibid., 13).

Biodiesel in India can be derived from a variety of sources. As will be explained later on (see chapter 3.2.1), the focus in India is set on TBOs, of which more than 300 species exist in India.24 None of these TBOs has been traditionally used for biodiesel generation in large quantities. However, TBOs have some generic advantages:

− they are perennial plants, therefore, requiring an initial investment for planting and field preparation only once during many years (cf. Int. DBT);

− they generally need less inputs than cash crops and can even grow on less fertile land (Altenburg et al. 2009, 21).25 However, as demonstrated in chapter 4.1, this is a highly disputed point as the most competitive ratio between inputs and outputs under a given set of conditions (rainfall, soil quality, temperature etc.) – at least for the case of Jatropha – still needs to be found out.

Although Jatropha is not being exclusively promoted out of all possible TBOs, it is at least the plant on which most efforts have been put since 2003/4. This is due to a very positive first assessment by the Planning Commission (PC) for the Indian case (cf. PC 2003 110-1; also Altenburg et al. 2009, 50), as the following chapter on the policy framework highlights.

3.2 Policy framework for biofuels and biodiesel in India

India has a strong federal system (cf. Altenburg et al. 2009, 48). Therefore, one has to pay special attention to the state level’s policies and regulation. States are responsible for topics such as land rights, agriculture, forest management and local government issues (cf. ibid., 49), whereas the central level, the GoI and its ministries are responsible for taxes, fiscal in-centives and demand side measures, e.g. blending quotas (cf. ibid., 49). This has led to a situation with multiple regulation and promotion systems being in place with various objec-tives for the production of Jatropha (cf. ibid., 48; Shailesh 2009, 14).

23 It is assumed that the 4.6 Mio cars in Delhi contribute to the air pollution with 64%, 52% in Mumbai, 30% in Kolkata (cf. Chandel et al. 2007, 373; also Francis et al. 2005, 15). 24 See for an overview on TBOs: Altenburg et al. 2009, 20 et sqq; Gonsalvez 2006; NOVOD 2008; TERI & gtz 2005, and especially on the comparison of environmental impact of biofuel feedstocks: Gmünder 2008, 9. 25 Contrary, the FAO (2008, 67) states: “Growing any crop on marginal land with low levels of water and nutrient inputs will result in lower yields. Drought tolerant jatropha and sweet sorghum are no exception.”


3.2.1 Federal level

On the federal level, a national biofuel policy is still pending and being worked out by the Ministry of New and Renewable Energy (MNRE).26 The last attempt to establish such a policy was rejected on November 3rd, 2008 by the Prime Minister, Dr. Manmohan Singh, after it had been approved by the Indian Cabinet on September 11th, 2008. The Prime Minister rejected the policy due to the lack of proving the feasibility of biofuel production (cf. Ghildiyal & Sethi 2008). The policy approved by the cabinet in September 2008 had not been made public. Therefore, information provided on this policy is based on secondary sources (interviews, articles etc.) and has to remain preliminary until the final version will be approved. However, it is deemed to be important to provide this information here as it sheds light on the general directions and policies relating to biodiesel production in India.

The history of the pending national biofuel policy is characterized by setting highly ambitious goals, which have not been reached until today, and several setbacks. The driving force be-hind the national biofuel policy is the PC, which was assigned with this task by the GoI. The function of the PC, chaired by the Prime Minister, is to take over

“an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development.” (http://planningcommission.nic.in/aboutus/function.html, access: 1.4.09).

It can thus be seen as a crucial actor in the Indian governance system (cf. Wagner 2007, 11).

Already in 2002, the PC confirmed high ambitions to cultivate Jatropha in India in its report on the ‘India Vision 2020’. The aim was to plant Jatropha on 10 Mio ha of land, thereby pro-ducing up to 7.5 Mio t of diesel and creating jobs for 5 Mio people until 2020, an aim that was deduced from the vision for India of the former president, Abdul Kalam (cf. Abdul Kalam 1998; Francis et al. 2005, 17; PC 2002, 74). In 2002, a National Committee on Development of Biofuels (NCDB) has been set up under the guidance of the Planning Commission. As a first result, the NCDB published a first report in 2003 including a long-term plan with the aim to substitute 20% of India’s need for diesel with biodiesel, derived especially from the nonedible oil plant Jatropha, by 2011/12, for which an optimistic vision was projected (cf. Altenburg et al. 2009, 50; Gonsalves 2006, 7). It was calculated that for approx. 66.9 Mio t of diesel it would be necessary to produce an estimated 13.4 Mio t of JBD on approx. 11.2 Mio ha of land until 2012 (cf. PC 2003, 113). The availability of this land was based on the as-sumption that India possesses large areas of so-called ‘wasteland’, and that Jatropha would be planted in large quantities as hedge plants, in agro-forestry projects, along railway tracks and in under-stocked forests (cf. NABCONS 2006, 4-6; Shiva 2008, 13). In this 2003 report, it was foreseen that a demonstration project would be carried out between 2003 and 2007, cultivating Jatropha on 400,000 ha and thereby producing 3.75 t of oil seed per ha and year (cf. PC 2003, 120). In the PC’s 2003 report, Jatropha has been chosen as the preferred plant based on the assumption that the plant would require low water and fertilizer inputs, and that it is “not browsed by cattle or sheep, pest resistance, easy propagation, high seed yield and

26 In 2006 the MNRE was demanded by the GoI to prepare a national biofuel policy. The MNRE has also received the mandate to do research activities on the application of biofuels (cf. Int. MNRE).

40 JANA LATSCHAN

ability to produce high protein manure” (Gonsalves 2006, 7).27 In a second step a commer-cialization period was envisaged for the period 2007-2012 with the aim to enhance Jatropha cultivation and to install the necessary plants for the processing of Jatropha based vegetable oil (SVO) into biodiesel (cf. PC 2003, 119). Furthermore, in 2003 the Ministry of Rural Devel-opment (MoRD) has been declared the nodal ministry for the implementation of the 2003 report’s recommendations (cf. Adholeya & Dadhich 2008, 163). Since then, several actions by different ministries were being undertaken, which have also been involved in the discus-sion of the national biofuel policy, among others:

− Micromissions for the plantation of Jatropha on selected ‘wasteland’ areas were being started by various ministries, like the Ministry of Rural Development (MoRD) being the responsible ministry for coordinating Jatropha plantations on wasteland, the Ministry of Agriculture (MoA) and the Forest Department (via its Joint Forest Management Commit-tees (JFMC) and Forest Development Agencies (FDAs)28 and as a part of national af-forestation programmes of the MoEF). These activities form part of the demonstration phase of the National Mission (cf. ibid., 48-9, 54).

− The MoRD, via its Department of Land Resources, developed a wasteland atlas, which defines and measures twelve different types of ‘wasteland’ in India.29 Additionally, the MNRE commissioned the development of a biomass resource atlas of India with the aim to provide “an outlook of the biomass resources in the country with a special reference to their potential for power generation” (http://lab.cgpl.iisc.ernet.in/Atlas/About.aspx, access: 5.4.09). 30

− The National Oilseeds and Vegetable Oils Development Board (NOVOD) belonging to the MoA was assigned being responsible for implementing a subsidy scheme for promot-ing different kinds of tree borne oilseeds (TBO). Moreover, the National Bank for Agricul-ture and Rural Development (NABARD) provides loan assistance via its Rural Infrastruc-ture Development Fund also applicable for biodiesel plantations (cf. Altenburg et al. 2009, 54; TERI & gtz 2005, 24).

− In 2005, the Ministry of Petroleum and Natural Gas (MoPNG) announced a biofuel pur-chase policy that came into force 1st of January 2006. The policy identified 20 centers in twelve states to procure from registered suppliers and to distribute biodiesel involving public sector oil companies at a fixed purchase price of 25 Rs. The price – depending upon market conditions – will be revised regularly (approx. every six Months, currently the price is at 26.5 Rs (cf. Adholeya & Dadhich 2008, 20-1, 164-6; NABCONS 2006, 14, 41; Shiva 2008, 13). The MoPNG also deals with the issue of biodiesel quality. JBD pro-duced needs to follow the standards of the Bureau of Indian Standards (BIS). For this purpose, testing facilities at the purchase centers have been established and biodiesel manufacturers have to obtain a timely limited registration at the purchase centers, which needs to be renewed once a year (cf. Adholeya & Dadhich 2008, 164-5). So far, stan-

27 The PC also assumed that seed production could be 3.75 t/ha, with an oil yield of 30-35 per cent, resulting in a net oil yield of about 1.2 t/ha. It was furthermore stipulated that Jatropha can be even grown under low rainfall conditions (200 mm/yr), on low fertility, marginal, degraded, fallow and waste lands (cf. PC 2003, 126). 28 The MoEF encourages several states to plant Jatropha in degraded areas with a forest cover of less than 10% applying a participatory approach by JFMCs and FDAs (cf. NABCONS 2006, 13). 29 The atlas is publicly accessible at: http://dolr.nic.in/fwastecatg.htm. 30 The atlas is accessible after registration on: http://lab.cgpl.iisc.ernet.in/Atlas/Default.aspx.


dards have been set by the BIS only for B10031 (pure biodiesel), but not for the different blending levels (e.g. B20) targeted by the GoI (cf. ibid., 170-1). The MoPNG is also the nodal ministry for micro-missions on transesterification, blending, standard elaboration and commercialization of biodiesel (cf. ibid., 54; Int. MNRE).

− Finally, the Department of Biotechnology (DBT) of the Ministry of Science and Technolo-gy (MoST) has the mandate from the GoI to research on planting materials and produc-tion processes of the TBO (cf. Int. DBT; DBT 2006).

Although the national biofuel policy is not yet in place, there are some vertices that are gen-erally considered as fixed. Following Altenburg et al. (cf. 2009, 17, 40, 51-2), Adholeya & Dadhich (cf. 2008, 163-4), Bhutani & Kohli (cf. 2008b) and information provided in the inter-views, these include: fostering the use of biodiesel and bioethanol, exclusive use of non-edible oils derived from oil-bearing trees for biodiesel, predominant use of ‘wasteland’, provi-sions for subsidies / tax exemptions, export restrictions or limitations due to India’s own energy demands, formulation of a blending goal for 2017/20, setting of minimum purchase prices for seeds and biodiesel, setting up of a National Biofuels Development Board, specifi-cations on cultivation practices and buy-back agreements, quality requirements of planting material, but also a focus on 2nd and 3rd generation biofuels.

As mentioned before, there have been several setbacks in the development of the biodiesel sector in India, like the rejection of the national biofuel policy at the end of 2008 by the Prime Minister. Neither have the envisaged targets for the NMB been met so far,32 nor has the Mis-sion itself been consequently implemented (cf. Shailesh 2009; TERI & gtz 2005, 26). Fur-thermore, new projects for a demonstration plantation by the NMB have also been put on hold (cf. Int. MNRE). Therefore, and especially with a national biofuel policy still lacking, room has been opened up for multiple state level policies (cf. Altenburg et al. 2009, 57; Negi et al. 2006, 20 et sqq.; TERI & gtz 2005, 26).

3.2.2 State level

Analyzing all existing 19 state regulations and policies for growing and processing biodiesel would exceed the scope of this master thesis; therefore, exemplary cases of state level regu-lation are explained to demonstrate the scope of existing policies, in which companies that want to invest in the JBD business have to operate. Policies vary regarding land allotment to private / public companies, preferred types of land for cultivation, the setting of purchase prices for seeds, tax / subsidy incentives and their beneficiaries and labour division between the parties involved, thereby influencing the way risks are shared between the actors (see for an overview of six different state policies Annex 5).

Regarding land allotment different regulations prevail: Chhattisgarh for example limits land allotment to a regular size of 200 ha and only to public companies (cf. Negi et al. 2006, 23; Shukla 2006, 250), Rajasthan allows land allotment of up to 1,000 ha to private companies

31 The BIS Standard relevant is the IS 15607:2005, regulating the chemical and physical properties of biodiesel (cf. Adholeya & Dadhich 2008, 170 and 236-237 for details of the standard). 32 Initially, the PC foresaw that by 2007 approx. 2.2 Mio ha would be under Jatropha cultivation to reach a 5% blending goal. However, it is estimated that under the National Mission until 2007 only 0.4 Mio ha have been planted (cf. NABCONS 2006, 4; Bisht 2007; Koshy 2007a). Total biodiesel production in 2007 is estimated to be only at 0.03 Mio t or 45 Mio l (cf. FAO 2008, 15).

42 JANA LATSCHAN

as long as the share of 30% of total land identified for Jatropha cultivation is not exceeded.33 In turn, Tamil Nadu encourages contract farming with companies under different cultivation models including large block plantations (cf. Altenburg et al. 2009, 68; TERI & gtz 2005, 23). Uttharakand on the other hand focuses on small land holdings of around 1-2 ha (cf. Alten-burg et al. 2009, 58). Not only the amount and beneficiaries of land allotments differ, but also the types of land for cultivation vary between states: While some states, like Andhra Pradesh and Uttarakhand, limit cultivation to private wasteland and degraded forest areas, others like Chhattisgarh follow a broader approach looking at degraded forest land, revenue land, com-mon and private ‘wasteland’ (cf. Altenburg et al 2009, 67 et sqq; Shailesh 2009, 15; TERI & gtz 2005, 23). Furthermore, there is no clear focus on a single feedstock: Chhattisgarh and to some extend also Rajasthan primarily focus on Jatropha (cf. Altenburg et al. 2009, 66; TERI & gtz 2005, 23). But some states prefer a cultivation of other TBOs like Neem or Pon-gamia (Andhra Pradesh, Karnataka), or they let farmers decide which mix to use applying a multi-feedstock approach (Karnataka).

Apart from that, states have set differing price regulations: There is a broad range of mini-mum purchase prices fixed by states to be found ranging from 3.5 Rs / kg in Uttarakhand, and 5.5 Rs / kg in Chhattisgarh up to 7 Rs / kg in Rajasthan. However, in many states far-mers are free to sell their produce on the market at varying prices (cf. Altenburg et al. 2009, 57 et sqq.). Not only do price regulations differ, but also subsidies and incentives schemes are heterogeneous: These vary in view of beneficiaries and scope. Some states directly ben-efit farmers by providing a limited number of seedlings free of costs (Andhra Pradesh, Chhat-tisgarh) or at a subsidized price of 1 to 1.5 Rs per seedling (Tamil Nadu), or they pay the beneficiaries for pit digging and maintenance works via individual pay cheques from state institutions (Uttarakhand). Andhra Pradesh heavily subsidises the installation of drip irrigation by covering 90% of the costs incurred by farmers (cf. TERI & gtz 2005, 23). Incentives for companies processing seeds range from a complete exemption of seeds from purchase tax and SVO from VAT (Tamil Nadu) (Altenburg et al. 2009, 68) to VAT exemption of JBD only (Uttarakhand). Some states actively pursue the use of central funding schemes like the Na-tional Rural Employment Guarantee Scheme (NREGS) (see chapter 3.2.3) as in the case of Andhra Pradesh or Karnataka.

State regulations vary as well regarding the duties of companies set by state governments, e.g. Tamil Nadu only provides loans if companies assure a buy-back agreement with farmers being in place (cf. Altenburg et al. 2009, 68; Negi et al. 2006, 25), whereas in Andhra Pradesh companies carrying out contract farming models are required to ensure a minimum rate of plant survival. Rajasthan demands companies to establish processing, transesterifica-tion units and nurseries, to undertake R&D activities, to generate employment by engaging a minimum of 50% unskilled labour from local areas, to timely start the plantation process with-in three years and to adopt a micro irrigation management system (cf. http://www.biofuelraj.gov.in/Revenue-Rules-Bio-fuel.pdf, access: 5.4.09).

Furthermore, not only the degree of institutionalisation varies between states but also the degree of inclusiveness. Whereas the state government of Uttarakhand has initiated a Public

33 However, latest data available form a monthly progress report in August 2008 showed that no major land allot-ment to companies has taken place in Rajasthan, see: http://www.biofuelraj.gov.in/mpr.pdf [access: 5.4.09].


Private Partnership (Uttarakhand Biodiesel Board) with one company (Uttarakhand Biofuels Limited - UBL) and the Van Panchayat34 as a third partner of the PPP as well as the JFMCs as partners for land identification, others have created special government boards, like the Chhattisgarh Biofuel Development Authority (CBDA)35 or the Rajasthan Biofuel Authority36, or they have transferred responsibilities to already existing institutions (Andhra Pradesh) (cf. Altenburg et al. 2009, 63; Shailesh 2009, 15; TERI & gtz 2005, 23).

Concluding, differing state policies and regulations open up room for different risk develop-ment pathways and also different modes of risk sharing between actors. Additionally, these state policies are complemented by a set of other (central) support schemes and policies as sketched in the next section, judged as relevant for risk assessment and management.

3.2.3 Other regulations and policies relevant for JBD

The GoI supports the funding of JBD via various central programmes.The most prominent ones are national rural employment programmes and afforestation programmes.

The NREGS37 put in place in 2005 by the MoRD foresees that

“Every adult living in rural areas who is willing to do unskilled manual labour for 100 days in a year has a right to employment within 15 days of registration or to a compensatory unemployment allowance“ (Altenburg et al. 2009, 56).

The MoRD provides funds for these occupational activities based on annual plans elaborated by the village level Panchayat institutions (cf. Altenburg et al. 2009, 56; MoIB 2009, 783-5). The second programme derives its importance from the fact that huge amounts of land in India are considered as forest land (22%), owned mainly by the government. But those areas are often heavily degraded with half of them with a forest cover of 40% or less. Therefore, afforestation becomes a priority by so-called JFM policies, as a joint approach of local com-munities and state forest departments for the management of forest areas via JFM commit-tees. These are encouraged to manage those areas as the non-timber forest products ob-tained are targeted to sustain their livelihoods (cf. Altenburg et al. 2009, 47-8; MoIB 2009, 284-6; TERI & gtz 2005, 65).

Furthermore, a national auto fuel policy was approved in 2003 with clearly set emission re-duction targets, as an answer to massive air pollution problems caused by an increasing ve-hicular sector. This policy already recommends utilization of biofuels to achieve the reduction targets (cf. Kumar & Ram Mohan 2005, 424-5; TERI & gtz 2005, 25).

Following this brief description of relevant policy issues the current state of JBD business needs attention.

34 The Panchayati Raj institutions (PRI) are elected bodies on the different levels of Indian rural land organization. According to the distinction of village, block and district levels there are Gram Panchayats (village level), interme-diate Panchayats / Panchayat Samiti (block) and Zilla Parishad (district level). At the beginnings of the 1990s they gained constitutional status. The Panchayat Act of 1996 (PESA) even broadened their rights especially in the tribal areas, including their right to control the common lands and other common property resources, which is especially important for the issue of land allotment for Jatropha plantations (cf. Altenburg et al. 2009, 45; MoIB 2009, 767; Shiva 2008, 23; http://panchayat.gov.in/ - Website of the Ministry of Panchayati Raj, GoI). 35 CBDA website http://www.cbdacg.com/; See also Adholeya & Dadhich 2008, 21; Shukla 2006, 248. 36 Website of the Biofuel Authority of Rajasthan: http://www.biofuelraj.gov.in/. 37 The information on NREGS is taken from Altenburg et al. 2009, 41, 46-8, 54-6; MoIB 2009, 783 et sqq..

44 JANA LATSCHAN

3.3 Current patterns of JBD production and use in India

There is a broad range of organizational models of the value chain of Jatropha based biodie-sel production in India. 38 Value chain models vary considering different parameters like

− risk-taking or risk-sharing actors (state, private small / large farmers, companies),

− cultivation sizes (small, medium, large),

− (non-)integration of cultivation and processing,

− centralized or decentralized processing,

− type of cultivation (as hedges or block plantations; monocultures or intercropping)

− type of land used (degraded forest areas, common lands, private unused land, ‘waste-lands’, etc.).

Moreover, there is no comprehensive survey covering all production models (cf. Altenburg et al. 2009, 17). Due to the focus on the large-scale production for the purpose of biodiesel generation of this analysis and the complexity of planting and production models, those models will be at the center of attention that – based on the interviews and literature re-search,

– were identified to be among the core models of value chain organization and / or

− which are actually applied by companies operating in India or by state governments aim-ing at a large-scale supply of raw material.

Among the companies involved39 in the production and processing of JBD (upstreaming and downstreaming40) are firstly, public (e.g. IOC, Bharat Petroleum Corp. Ltd., Hindustan Petro-leum, Gujarat Oleo Chem Limited (GOCL)) and private Indian companies (IKF Green Fuel Ltd.; Southern Online Biotechnologies; Reliance; Medors) as well as JVs between them (e.g. BREL),41 and secondly, private foreign companies, which are partly operating in the frame-work of JV with other foreign companies (e.g. D1-BP Fuel Crops, Mission Biofuel, Naturol Bioenergy) or with local companies (e.g. D1 Mohan Bio Oils Ltd.; D1 JV with Williamson Ma-gor Group). Among these, the activities of D1 and BP and their JV are the most prominent as they are the biggest player in the field (cf. GEXSI 2008, 30). Additionally, state companies (like Indian Railways as the largest Indian diesel consumer with an annual demand of 40 Mio t (cf. Adholeya & Dadhich 2008, 32-33)) as well as private ones (TATA, Daimler) are already active in testing the applicability of JBD in current engines.

Giving a full picture of all companies involved would exceed the scope of this thesis. Howev-er, the general picture is that most processing capacities remain unused or are used with other or imported raw materials (cf. ibid., 28; Gonsalves 2006, 9), as the supply of assured raw material in terms of Jatropha seeds is still insufficient and hampers the further setting up 38 For an overview on different value chain models, see Altenburg et al. 2009, 17 et sqq. 39 See for overviews on companies active in the Indian JBD business: Adholeya & Dadhich 2008, 26-40; Ariyanc-hira 2005; GEXSI 2008, 130-1; Gonsalves 2006, 9, 30-31 and websites listed in the literature. 40 The terms of upstreaming and downstreaming refer to the stage of the biodiesel value chain; whereas explora-tion, production, transportation and storage generally belong to the upstream part, downstreaming consists of the further processing and refining and lastly the commercialization of the produce (cf. GARP 2009, 2). 41 BREL (Bharat Renewable Energy Ltd.) is a JV between Bharat Petroleum Corp. Ltd, the biotechnology compa-ny Nandan Biomatrix Ltd, and Shapoorji Pallonji Co. Ltd, a construction company (cf. Singh 2008a).


of a JBD processing infrastructure (cf. Gonsalves 2006, 9; Shailesh 2009, 17). The supply of JBD therefore is still marginal (cf. Altenburg et al. 2009, 37). Transesterification units in oper-ation are rather pilot plants (cf. Adholeya & Dadhich 2008, 33; TERI & gtz 2005, 13). From an actor-driven perspective different value chain models of JBD are summarized in Table 7 building on the following criteria: scale, type of land used and main actors involved. The pre-vailing land-holding patterns with an average land holding size of approx. 1 ha (cf. MoSPI 2006; see also Annex 6), that limit the availability of large single stretches of suitable ‘wastel-and’ (cf. Adholeya & Dadhich 2008, 166), allow especially for models involving forest or common lands and models involving small to medium scale farmers (on an individual basis or as cooperatives).

Table 7 Current patterns of value chain organization in India by actors involved (Source: own table

based on: Altenburg et al. 2009; GEXSI 2008; TERI & gtz 2005, 65-70 and interviews)

Type Main driving actors

Description

Larger block plantation on private land

Private com-panies with large lan-downers

e.g. private companies in Tamil Nadu (In this case D1 Mohan Bio Oils Ltd.) cooperate with absentee landlords to put private land under productive use; landlords pay large parts of the inputs / labour costs, company supports cultivation process with expertise, interest-free loans and buy-back-agreement; processing will be done by compa-nies.

Larger block plantation on public land

Private com-panies

State leases land to public companies (e.g. Chhattisgarh with Indian Oil Corporation Ltd. (IOC) and t.b.c. Bharat Petroleum Corporation Ltd. (BPC)) or private companies as part of a JV with state authorities; JV responsible for plantation, company responsible for further processing.

Contract farm-ing on private land (hedge plants & small block planta-tions)

Private com-panies & sometimes state de-partments

Free market approach, small / medium farmers are re-sponsible for cultivation and harvesting; farmers sell seeds to companies (public / private), sometimes via middlemen, at a minimum support price or under a buy-back-agreement; farmers can receive support for inputs via loans / NREGS or subsidized inputs, but in some cases also have to buy inputs. See e.g. Karnataka, Andhra Pradesh, Chhattisgarh, Tamil Nadu. Processing is done by companies either in decentralized units or in larger units (mainly still to be set up, cf. e.g. Int D1-BP). Contract farming can also include agricultural land.

46 JANA LATSCHAN

Forest land plantations

Forest / state departments & private companies

JFMCs & similar groups harvest and sell seeds to a bio-diesel processing company (sometimes via some sort of forest cooperatives, e.g. in Uttarakhand & Chhattisgarh); mainly state departments & central funding schemes, sometimes companies support input for cultivation to a large extent A similar approach is applied for communal land in Chhattisgarh.

Cooperative farming on pri-vate land

Cooperatives & local far-mers

Cooperatives are responsible for the cultivation process, sometimes state sponsored inputs and also for processing of SVO to have more value added with far-mers. See e.g. Karnataka pilot project. Produce (SVO or biodiesel) is sold for further marketing.

NGO-driven farming on

private land

Non-governmental organizations (NGO; as promoters) & local farmers

NGOs take over promoting role from private companies or states departments by providing inputs & training; out-put is processed locally mainly for local consumption / rural electrification projects, e.g. Humana, Utthan projects or Winrock projects.

Interviews with several companies confirmed that contract farming models with individual

farmers and farmers groups or PRI prevail.42 These contract farming models can be catego-

rized in two groups: direct contract farming and tri-partite contract farming, depending on the

financing modes of the initial investment costs by the farmers (Figure 3). However, interviews

showed that companies also strive to acquire their own land for corporate plantations (Int.

Medors). Furthermore, the analysis provided above reveals another pattern in the current

value chain organization: cultivation is mostly done by local farmers, committees or coopera-

tives (with or without state and central support schemes).

42 Cf. Int. D1-BP Biofuels / MB / Medors / Mercedes / NABARD; also Int. GRAIN / PRAYAS. Also GEXSI con-cludes in a recent study that almost 1/3 of all plantations are done under contract farming and another 50% under a combined model of contract farming and plantation (cf. GEXSI 2008, 129).


Figure 3 Types of contract farming of companies (Source: Own figure).

The further processing of the seeds to the final products (SVO or biodiesel) – if not arranged by NGOs or cooperatives when targeted primarily for local consumption – is mainly in the hand of public and private companies, therefore controlling large parts of the value added. This trend has been confirmed in many of the interviews with companies’ representatives (cf. Int. D1-BP / Growdiesel / NABARD / Medors; also: Altenburg et al. 2009, 75 et sqq.).

Apart from institutional arrangements, one needs to look as well at a more product- or process-oriented perspective of JBD production to fully understand the JBD value chain and its integral parts. From seed to diesel, a set of steps needs to be followed. After seedlings are raised in nurseries (from seeds or stem cuttings), they are transplanted to the field and grown in different plantation styles (i.e. hedges or different densities). After two, mostly three years first yields can be collected. Seeds need to be dehusked and the oil needs to be ex-pelled by oil mills, mechanical pressing or solvent extraction from dried seeds. In a further step, the oil (SVO) is refined (e.g. by filtering) and could already be applied to some engines. To make it suitable for more applications it needs to be transesterified by using alcohol (mostly methanol) and heat. The result is a methyl-ester which can be blended with fossil diesel (cf. Achten et al. 2008; Kaushik et al. 2007, 307-8). Figure 4 summarizes the various stages of Jatropha cultivation and processing as well as the (by-) products derived from the process.

However, the figure represents an ideal overview. Neither are all inputs given in all cases of value chain organization, nor are all outputs / (by-) products generated. For example, inter-cropping is only one possible way of cultivation, thereby generating other products that might not have been able to being cultivated without the Jatropha plantation. Additionally, the seeds could also be sold for other purposes, like breeding new Jatropha seedlings, or for purposes alien to JBD, like producing soap, which is not considered in this value chain. Therefore, the figure rather aims at giving a general overview on the process of JBD genera-tion.

The aim of the chapter was to provide an overview of the current situation of the JBD busi-ness and its economic and policy environment to identify relevant factors that shape and

48 JANA LATSCHAN

influence the ‘system’ of JBD production, which is assumed to impact on the emergence and scope of risks. Chapter 4.2 will analyze more in detail these developments of risks linked to large-scale JBD production based on insights gained from chapter 3.

Input Output

seeds/seedlings

Nursery

irrigation water

fertilizerleaves manure

irrigation water

wood from pruning

pesticides Apiary products Honey / wax

diesel fuel (pumps / tractor)

Cultivation Products of intercropping

a.o. Aloe Vera, Bamboo, Medicinal

plants, bananas, chilis

fertilizer weeds fodderland

SeedsHusks Fertilizer or (after

briquet-ting) fuel / gas / power (4)

energy (power / steam)

de-oiled (2)/ oily cake (1) (leftover

from seeds)

Fertilizer / power / gas & slurry (4)

fatty acids Soap / tensides substitution

chemicals for refining

shells (3) Power (4)

Meal (3) Biogas or (after detoxification(5))

fodder

Jatropha oil (SVO)

alcoholealkaline catalyst

Transesteri-fication

K-Fertilizer /Potassium

Fertilizer

energy Glycerol Pure Glycerinewater wastewater recycled water

Jatropa Metylester

Usage public transport

Usage Individual

car

(Adapted in case of SVO)

Power unit

household stoves for cooking

mobile application

Extraction & refining

(dehusker / oil mil / chemical &

physical

refinery and other steps of pretreatment)

stationary application

Cultivation

Processing

Consumption

Figure 4 Product- and process-oriented value chain model for JBD. Source: Own figure based on own

field visits as well as Achten et al. 2008; IFEU 2007, 3, 9, 10-1, 15, 16, 17; NABCONS 2006, 28-32,


79, 111; Altenburg et al. 2009, 19. Note: by-products depend on the production system. Most common

by-products are displayed here. (1) Decentralized production (2)

centralized production (3) centralized decorticator (4) surplus power only (5) 100% detoxification is not

proved feasible at large-scale (Jongschaap et al. 2007, 15-6).

50 JANA LATSCHAN

4 TESTING THE RGF: THE CASE OF JATROPHA CULTIVATION IN INDIA

This chapter will identify, assess and evaluate risks as explained in chapters 2.3 and 2.4, thereby applying the IRGC-RGF.

4.1 Risk pre-assessment

Having defined risks as a mental construct (see chapter 1.2; cf. Renn 2007a, 6 et sqq.), the objective of the stage of risk pre-assessment is to lay the foundation for all further stages by delivering insights into different perspectives of conceptualising ‘large-scale JBD production in India’ by different stakeholders. A second aim is to figure out which societal groups might assess certain issues as economic, ecological or socio-political risks (framing). Secondly, cases of dissent or consent on the selection of risks need further observation, applying dif-ferent indicators: a) dissent / consent on goals of selection rule; b) dissent / consent on re-levance of evidence respectively values or c) choice of frame (fate, risk, opportunity) (cf. ib-id., 8 et sqq.). Furthermore, the present chapter will shed light on existing activities for identi-fying and assessing hazards and risks.

4.1.1 Stakeholder perspectives: overview

Generally, a risk governance process must make on the one hand a representative selection

of stakeholders, allowing for the inclusion of a broad range of perceptions, opinions and un-

derstandings. On the other hand, risk governance itself needs to pay attention to a rational

equilibrium between representativeness and feasibility of the study, leading to an inclusive

and selective approach at the same time (cf. Renn 2008a, 43). Based on a literature survey,

a field visit to India and a general framework of stakeholder identification43, the following set

of stakeholders is identified for the case of large-scale Jatropha production for biodiesel in

India: JBD industry, media, research institutes, government, NGOs, banks, general public,

and farmers.44 Furthermore, recent relevant written statements and articles issued by repre-

sentatives of stakeholder (groups) or addressing the concerns and views of these groups

have been analyzed to extract major positive as well as negative consequences identified by

these groups. This leads to the following picture of relevant stakeholders and sources for

analysis (Table 8).

43 For example, the IRGC-RGF proposes to look at least at four major stakeholder groups coming from the sphere of politics, business, science and civil society (cf. Renn 2008a, 43; see also Schaltegger & Petersen 2007a, 41, 56 and chapter 3.0 The ‘system’ of Jatropha biodiesel generation in India). 44 For each of the stakeholder groups, a limited number of representative organizations, companies and institu-tions has been selected and asked for interviews or to answer a questionnaire. Out of the addressed 62 stake-holders (in the sense of organizations, companies, ministries) representatives from 25 have taken part in an inter-view and three have answered a questionnaire (see Annex 1).

TESTING THE RGF: THE CASE OF JATROPHA CULTIVATION IN INDIA 51

Table 8 Stakeholders analyzed for the case of JBD in India [Source: Own figure. Source of information provided by the respective representative; I = Interview, Q = Questionnaire, T = Written statement (newsletters, campaigning material etc.)].

Media (T)

Business Today; Hindustan Times; India To-day; MINT.

Government CBDA (T); PC (T); MoA - MNRE (I); MST – DBT (I); NOVOD (I / T).

NGOs

CECOEDECON (I); Centre for Science and Environment (I); GRAIN (I/T); Humana People to India (I); �Kalpavriksh Envi-ronment Action Group (I/T);�NARI (I); Navdanya (T); NGO Coalitions on Biofuels (T); PRAYAS (I/T); SPWD (I/T); UTTHAN (I / Q.

JBD Industry

D1-BP Biofuel Crops India Pvt. Ltd. (I), GROWDIESEL Con-sortium (I); ITC Ltd. (I); Medors Biotech Pvt. Ltd (I); Mercedes Benz India Pvt. Ltd. (I); Mis-sion Biofuel (I); Southern On-line Biotechnologies Ltd (Q); Tree Oils India Ltd (T); Wi-nrock (I).

Research Institute

Mahatma Gandhi Institute of Applied Sciences, Jai-pur (I);�ICRISAT (T); In-dian Agricultural Research Institute (I); Tamil Nadu Agricultural University (T); TERI (I / T);�University of Rajasthan (I).

Farmers / farmers groups Banks� NABARD (I/T)

General public

As the table shows, the majority of interviews has been conducted with companies and

NGOs. The second largest group has been research institutes, followed by governmental

institutions. In the phase of addressing stakeholders for interviews a balanced number of

stakeholder representatives was meant to be integrated in the survey. However, due to a

variation in response to interview requests, access to representatives from companies and

NGOs has been easier, compared to for example ministries. Regarding the media, interviews

with single journalists have not been deemed appropriate. A QCA was targeted from the be-

ginning of the research as it is thought that it provides a broader picture of media coverage

on the issue of JBD in India. The ‘general public’ has not been addressed by any form of

survey method as this exceeds the limits of this master thesis. For the case of farmers and

farmer groups, language barriers and the lack of independent access to these people have

been the main reasons, why interviews have not been possible. In few cases, sporadic con-

tacts have taken place under the supervision of accompanying organizations / companies,

which were not allowing for an in-depth interview. However, secondary information from

NGOs is available that have undertaken research on the opinion and experiences of farmers

involved in planting Jatropha; this will be taken into account while analyzing the NGOs’ per-

ceptions and framing. Consequently, information in the form of written statements and ar-

ticles is analyzed too in order to give a more balanced picture as well as to supplement

52 JANA LATSCHAN

statements given in the interviews. The information provided on how risks associated with

JBD production in India are framed will be clustered for all stakeholder groups into three di-

mensions: ecological, economic and social consequences, each having a positive and nega-

tive side (see table 9).

4.1.1.1 Stakeholder perspectives: industry

In the industry sector, many companies are still in the stage of developing a business case for the JBD business, i.e. setting up cultivation structures and procedures as well as processing units on a larger scale (see chapter 3.3). Therefore, not all risks and benefits might have materialized so far as field experience on a large-scale is still missing; however, the influence of risks and benefits perceived is a crucial factor impacting on the future busi-ness development and investment strategies of the companies.

Companies involved in the cultivation, processing and commercialization of JBD in India try to stress the benefits and sustainability arguments of producing biodiesel from Jatropha. They follow four lines of argumentation. First of all, looking at the consumption of the pro-duce, they stress a significant emission reduction compared to fossil fuels (cf. Int. D1-BP / Growdiesel / SOB; Nandan n.d., 4). Secondly, with regard to the cultivation of Jatropha, they argue that the production of JBD would lead to increased rural development by promoting rural employment through the plantation process (cf. Int. D1-BP / Growdiesel / Mercedes / MB / Winrock; Nandan n.d., 4; Quinn 2005, 12-3). Thirdly, it is argued that Jatropha cultiva-tion would improve the environmental conditions for example by improving the quality of soils, by preventing soil erosion, by contributing to afforestation, by recovering wastelands and by enhancing carbon sequestration due to new Jatropha plantations (cf. Int. D1-BP / Growdiesel / Mercedes / MB; Nandan n.d., 1, 4; Quinn 2005, 4). Fourthly, looking at the broader economic picture in India, they argue that JBD – as a renewable energy source – is a viable option to increase the energy security or self-sufficiency of the country (cf. Int. D1-BP / SOB; Nandan n.d., 1), thereby contributing to the prevention of a further outflow of for-eign exchange and fueling the economic development of the country (cf. Int. D1-BP / Mer-cedes). Furthermore, it is assumed that Jatropha is a disease-free plant or at least free of uncontrollable diseases (cf. Int. Medors, Quinn 2005, 16, 22-3) and not competing with food production (cf. Int. MB; TOIL n.d.).

The major risk mentioned by a series of business representatives is the failure of long-term marketability of JBD mainly due to three reasons (cf. Int. D1-BP / Growdiesel / Mercedes / Winrock): Firstly, the current unattractive price-cost-ratio (high seed prices, low purchase-price for JBD set by the government) and, secondly, the low crude oil price, which could lead to the situation that companies would not find a business case to develop and that those farmers already engaged would have to drop their plantations again. Thirdly, as a further source for the risk of business case failure the high variety of yields in terms of output in kg or t per ha and the oil content of seeds give cause for concern in the interviews.

There are only few critical voices in the business sector, mainly raised by consultancies or companies, which pursue a different Jatropha based business model, that question the social and environmental impact of large-scale JBD production. They underline the following risk


issues: social tensions due to a dispute about ‘wasteland’ (cf. Int. Winrock), stress of local water resources due to the consumption by Jatropha plantations (cf. Rajagopal 2008a, 4,5), an unfavourable net emission balance (cf. Int. Mercedes; Rajagopal 2008a, 4) if the whole life cycle of JBD is taken into account, a loss of biodiversity in monocropping plantations (cf. Int. Winrock; Rajagopal 2008a, 5) and, lastly, a risk of food competition (cf. Q. SOB / Wi-nrock; Rajagopal 2008a, 4), if seed prices remain high.

4.1.1.2 Stakeholder perspectives: NGOs

Although the JBD business is still in a nascent stage, there are already many NGOs dealing with Jatropha and JBD in India; yet, there is hardly any NGO working exclusively on this is-sue, but many NGOs are starting to integrate it in their research and campaigning activities.45

Even though there are some NGOs that are promoting the cultivation and processing of Ja-tropha for the purpose of biodiesel in India, mainly for local consumption (cf. Shailesh 2009, 20),46 the overall position of the 'NGO scene' is a rather critical one regarding the large-scale production of JBD as envisaged by the government and corporate sector. In the perception of this particular group, negative consequences associated with it clearly outweigh possible benefits and are largely connected to the following risk issues and lines of argumentation:

− the loss of access to common lands, especially for poor people due to a privatization of this land by the state governments and companies (land grab),47 would further marginal-ize poor people and profits from the JBD value chain would be controlled by companies;48

− the pasture system would be destroyed in India since areas under Jatropha cultivation do not serve as grazing areas;49

− Jatropha would be a wrong investment for farmers and an income loss is feared, as the economic viability (and marketability) of JBD and a market for the seeds is not assured and farmers would have to heavily invest first;50

− the promotion of industrial monocultures and intensive agribusiness would result in nega-tive impacts on biodiversity and rural livelihoods as well as in an increase of the suscepti-bility of the plant to diseases and pests;51

45 E.g. CECOEDECON recently started a research project on the issue of large-scale JBD production, see Int. CECOEDECON. Other NGOs alerted by the impact of biofuels in other countries are closely monitoring the de-velopment in India, like GRAIN or SPWD. Others, who are normally focusing on different topics, now start investi-gating linkages with the issue of JBD, like CSE, which has been traditionally working on air pollution, energy and transport questions (cf. Int. CSE) or PRAYAS, whose focus is mainly on policy issues, which are currently under regulation and, in this specific case the already long existing Employment Guarantee Scheme (EGS), which was amended in 2005 by the introduction of Jatropha plants in the scheme and therefore subject of analysis by PRAYAS (cf. Int. PRAYAS). 46 See for example Humana to People to India: The NGO is operating in 40 different countries worldwide and is active in India since 1998. Part of its work is on sustainable Jatropha cultivation. In 2006 Jatropha cultivation began with the support of a World Bank project. In this project 40 farmers from different villages collaborated and Jatropha was grown only as fences. Now Humana received new funds from the TOYOTA foundation. As part of these funds a small expeller was established and until 2011 it is foreseen to plant 2 lakhs plants as fences. It is also intended to increase the plantations on ‘wasteland’ and on community land, as long as farmers do not grow anything on it. The aim of the NGO is to produce biodiesel for agricultural machineries and save money that must otherwise be spent for this purpose (cf. Int. Humana). 47 Cf. Bhutani & Kohli 2008 a/b; Int. CECOEDECON / CSE / SPWD; NAVDANYA 2007; PCB 2008; Shiva 2008, 25 et sqq.; SWPD 2008, 10. 48 Cf. GRAIN 2007; Int. CSE / KEAG / NARI; PCB 2008; SPWD 2008, 11. 49 Cf. Bhutani & Kohli 2008 a/b; Int. CSE / SPWD; NAVDANYA 2007; Shiva 2008, 12, 36; SPWD 2008, 10. 50 Cf. Int. CECOEDECON / CSE / NARI / PRAYAS / SPWD; GRAIN 2007; PRAYAS 2006; SWPD 2008, 11.

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− water scarcity could be enhanced due to the water-responsiveness of the Jatropha plant and as certain state give incentives to divert water to Jatropha plantations.52

Two issues need to be highlighted in the debate about risks of large-scale JBD-production, as they have been labeled being very critical by many NGO representatives:

− There is a heated debate about the so-called ‘wasteland’, which is perceived by many NGOs as a misleading term as it suggests that the land is waste and not serving any purpose at all, while they argue that it is an extremely important source for sustaining lively-hoods of the rural and especially poor population.53

− Secondly, the question of energy security as an aim selected by the government and supported by industrial activities has been generally and intensively questioned in almost every interview with NGO representatives, as it is feared that a large-scale production of JBD provokes the risk of an un-sustainable growth path in India. In this sense, JBD is seen as a way of strengthening a consumptive life-style of rich and middle-class people, of avoiding to rethink energy use patterns, efficiency and sufficiency strategies and there-fore, contributing to an increase in overall GHG emissions, individual transport and social disparities;54 some also question whether relative GHG emissions would decrease at all using JBD (cf. Int. CSE / SPWD).

Interestingly, the diversion of agricultural land for producing biofuels (food vs. fuel issue), which is heavily debated for other biofuels on the international scene,55 has hardly been raised in the interviews (cf. Int. CSE / Humana), and even if mentioned, it has not been treated as a major risk in the case of Jatropha in India regarding short-term prospects. But it is seen in some written statements as a possible future risk depending on the development of various factors, especially the price of seeds and oil (cf. GRAIN 2007; PCB 2008; Shiva 2008, 11; SPWD 2008, 11). Additionally, only few BGO official interviewed mentioned the risk of a substitution of 1st generation biofuels, like JBD, by other technologies (2nd or 3rd generation biofuels) (cf. Bhutani & Kohli 2008a/b; Int. SPWD). Other issues mentioned spo-radically were the risk of employment loss (cf. Int. SWPD) or the risk of intoxication or even death following the consumption of Jatropha seeds (contrary: cf. Int. HUMANA). One report included the risk of abuse of intellectual property rights if companies obtain patents for high-yielding Jatropha varieties, thereby limiting their use for farmers (cf. GRAIN 2007).

Regarding the benefits of large-scale JBD few NGOs, like Utthan,56 have given a more opti-mistic view by raising the following issues: employment will be generated, the multi-purpose

51 Cf. DECCAN/GRAIN 2007; Int. CECOEDECON / CSE / GRAIN / PRAYAS; NAVDANYA 2007; PCB 2008; PRAYAS 2006, 8; Shiva 2008, 9. 52 Cf. DECCAN/GRAIN 2007; Int. CECOEDECON / GRAIN / KEAG; NAVDANYA 2007; Shiva 2008, 10; SPWD 2008, 10. 53 Cf. DECCAN / GRAIN 2007; PCB 2008; Shailesh 2009, 21-2; Shiva 2008, 13. 54 Cf. Bhutani & Kohli 2008 a/b; DECCAN/GRAIN 2007; Int. CSE / GRAIN / KEAG / NARI / PRAYAS / SPWD; NAVDANYA 2007; Shiva 2008, 9, 19. NAVDANYA 2007, n.p. for example argues: “The massive infrastructure of fossil fuel based production and transportation systems cannot be maintained by converting food to fuel, and plants to oil for cars. The heavy infrastructure of automobiles and power generation needs to be adapted to the limits of the planet.” 55 See for example Fritz 2007, 2, 18 et sqq.; Maier 2007, 10; SWISSAID 2009. See also Shailesh 2009, 32. 56 It needs to be mentioned that the interviewee has been a former member of the Planning Commission, is still a member of a state biofuel board and is therefore closely linked to the government sector, although he has been interviewed as a NGO representative.


use of the plant and its by-products will create added value, JBD leads to a relative reduction of GHG emissions and particulate matter, the plant has a positive impact on alkaline soils, plant diseases are easy to cure, and it does not compromise food security (cf. Int. Utthan; Q. Utthan). Generally, JBD production is rather seen as a chance for providing a clean fuel al-ternative for local household consumption (cf. Int. SPWD / Utthan).

4.1.1.3 Stakeholder perspectives: government

The government on the central as well as state level is repeatedly said to be the largest pro-moter of large-scale JBD production (cf. Int. IARI 2) and is still investing in it to encourage companies to step into the business, e.g. by providing subsidies or land access on state level (see chapter 3.2.2). Apart from the interviews, several written statements have been taken into account.57

The first and most prominent line of argumentation in almost every interview and text ana-lyzed is the contribution of JBD to the energy security and independence of India. As outlined above, India is relying heavily on oil imports. Therefore, the biggest benefit mentioned is its contribution to increase self-sufficiency which allows continuing the growth path outlined by the GoI without relying on external supply.58 In this regard the Prime Minister already stated in his Opening Message to the PC 2003 report that the “[d]evelopment of bio-fuels [...] has become critical in the national effort towards maximum self-reliance - the corner stone of our energy security strategy” (PC 2003, w.p.; cf. also PC 2002, 5, 10, 73-4). In this line of argu-mentation, JBD is also seen to cause an additional positive impact on the foreign exchange balance (cf. CBDA n.d. a, 1; NOVOD 2007, II; PC 2002, 10, 70, 73). Furthermore, intervie-wees highlighted the contribution of JBD to an overall reduction of (GHG) emissions in com-parison to the use of fossil fuels and, due to the plantation of trees,59 to rural development especially by generating more employment for the rural poor,60 by putting ‘wasteland’ under productive use, by contributing to water conservation and, due to low irrigation needs, by contributing to afforestation, and by generally improving soil quality by the plant and its ma-nure61 as well as by enhancing fuel safety (cf. PC 2003, viii). With a view to the 19 states having implemented a biofuel program, Shailesh argues that most “states follow the rhetoric of Central Government in using wasteland for energy security and rural prosperity“ (Shailesh 2009, 14). Some states furthermore underline the option of additional income generation by Jatropha-based Clean Development Mechanism (CDM) projects (cf. CBDA n.d. b, 1; Lohia 2006, 255; Shukla 2006, 253). Much emphasis is also put on the by-products derived from

57 Although only few interviews with ministries have been carried out, a recent study confirms that ministries agree to a large degree regarding their position on biodiesel (cf. Shailesh 2009, 13). Statements assessed include the initial report by the PC issued in 2003 on biofuel development (cf. PC 2003), which has been one of the most prominent triggers for the business (Shailesh 2009, 11), and a strategy paper issued by the PC of India on the future vision of the country for 2020 (cf. PC 2002), which devotes large parts of analysis to the issue of biofuels and especially Jatropha, a fact that again highlights the importance of this plant for the Indian energy mix scena-rio. On the federal level written articles by key state representatives have been included for the cases of Chhattis-garh (cf. CBDA n.d., a/b; Shukla 2006) and Uttarakhand (Lohia 2006), as both states intensively foster the Jatro-pha business and have set clear goals to cover large areas with Jatropha plantations in the upcoming years (see chapter 3.2.2 and Annex 5; cf. Shailesh 2009, 14). 58 Cf. CBDA n.d. a/b, 1; Int. DBT / MNRE / NOVOD; Lohia 2006, 259; NOVOD 2007, II, 1; Shukla 2006, 252. 59 Cf. CBDA n.d. a/b, 1; Lohia 2006, 259; NOVOD 2007, 1; PC 2003, i-ii, viii; Shukla 2006, 253. 60 Cf. CBDA n.d. a, 2 / b, 1; Int. MNRE; Lohia 2006, 259; PC 2002, 5, 10, 71-4 / 2003, 132; Shukla 2006, 253. 61 Cf. CBDA n.d. a, 2 / b, 1; Lohia 2006, 259; NOVOD 2007, 2; PC 2002, 92 / 2003, ix, 132, 133; Shukla 2006, 253.

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the JBD production process (see Figure 4). They are seen as a further source generating income for the local people, improving rural living conditions (e.g. by providing biogas derived from the oil cake) and enhancing soil quality (cf. CBDA n.d. a, 4; Lohia 2006, 259-60; PC 2003, ix). Contraring to the NGO interviews, a positive picture prevails as Jatropha is per-ceived as a solution to various, sometimes even conflicting challenges of Indian develop-ment, like supporting a growing economy, especially within the transport sector, and improv-ing rural development including environmental conditions as well as reducing GHG emis-sions. Therefore, the former Deputy Chairman of the PC came to the conclusion that: “grown on a significant scale, Jatropha can clean the air and green the country” (PC 2003, n.p.). Supporting this picture, the PC’s vision for 2020 saw biofuels and especially JBD “as a po-werful stimulus to rural job-creation and prosperity, while radically reducing India’s depen-dence on imported fuels” (PC 2002, 73).

There are, however, some critical voices in the government raising concerns about the non-marketability of the JBD if prices of the final product were too high (cf. Int. DBT / MNRE), or if farmers would not be able to make a profit if yields were too low and/or prices for seeds sold would not cover input costs (cf. Int. DBT). Few are also worried about diseases that might harm the Jatropha plantations (cf. Int. DBT), about possible negative effects of monocultures on the environment and the susceptibility to pests caused by monocultures (cf. Int. DBT). Furthermore, there is a ‘cooling down’ observable regarding the position of the PC towards biofuels (cf. Shailesh 2009, 12, 30). First of all, it starts questioning the long-term socio-economic and environmental impacts of Jatropha, especially for pastoralism in India:

“Biodiesel (Jatropha) planting is being promoted through state agencies without seeing all the consequences such as blocking the migration route of animals [...] It is vital to ensure that the commons are protected” (PC 2006b, 29).

The 11th 5-year plan of the PC also shows some disappointment regarding the progress of the renewable energy sector including biofuels:

“While there were renewable energy programmes taken up in the past to address the above challenges [climate change & maximally develop domestic supply options for fuels, note of the author], the impact of these programmes were rather marginal“ (PC 2007, 383-384).

Yet, developing biodiesel for the sake of national energy security remains one of several im-portant approaches,62 although blending targets that once were at 20% are now being sof-tened:

“Depending upon the bio-diesel production and availability, the entire country may be pro-gressively covered with sale of 5% bio-diesel blended diesel by the end of the Eleventh Plan [2011/12, note of the author]“ (PC 2007a, 366).

62 See for example the following quotes by the Planning Commission: “GDP growth of 9% is not possible without a commensurate increase in supply of energy, electricity, coal, oil and gas and other fuels.” (PC 2006b, 51). and “From a longer term perspective of the growing threat of climate change and keeping in mind the need to max-imally develop domestic supply options as well as the need to diversify energy sources, renewables remain im-portant to India’s energy sector. […] Availability and access to energy are considered as catalysts for economic growth. The envisaged growth of the economy at 9% in the Eleventh Plan cannot be achieved without a commen-surate increase in the availability of energy.” (Both: PC 2007a, 342, 366).


The issue of food security has hardly been raised in the interviews (cf. Int. NOVOD) and has not been linked either with biodiesel in the texts analyzed; an explanation is seen in the fact that all statements have been based on the assumption that Jatropha will only be grown on degraded areas or on fallow land.

4.1.1.4 Stakeholder perspectives: research

The picture generated from the interviews with researchers and from related written sources is very heterogeneous. 63 None of the researchers had an overwhelmingly positive or nega-tive opinion about large-scale JBD production. Generally the lack of good long-term data was criticized. Therefore, most were cautios about recommending large-scale plantations or extrapolating on future developments (cf. Int. TERI 1 / IARI 1/2; ICRISAT 2007b, 10). Se-condly, most interviewees focused on the upstream part of JBD when speaking of ecological and/or economic risks. Regarding the benefits, arguments brought forward already by the corporate and government representatives are highlighted, like a contribution to energy inde-pendence64 and security by diversification (cf. Kumar et al. 2005, 424; Ramesh et al 2007, 1), saving of foreign exchange (Adholeya & Dadhich 2008, 137), a decrease of GHG emissions and particulate matter compared to fossil fuel (cf. Adholeya & Dadhich 2008, 185, 188, 190; ICRISAT 2006b, 1 / 2007b, 8) and a general support to generating rural livelihood.65 Fur-thermore, it is argued that due to its properties as being a hardy plant it can contribute to the reclamation of ‘wasteland’,66 which has not been under productive use so far, as Jatropha and its manure contribute to soil improvement67 and reduce soil erosion (cf. Int. IARI 2 / MGIAS; ICRISAT 2007a, 23; Ramesh et al. 2007, 5). Looking at specific negative and posi-tive consequences, it is clearly distinguished between plantations on small land patches un-der the control of local farmers and corporate farming on larger areas. Regarding the first case, less ecological or social problems are perceived to follow from Jatropha cultivation, as this type of plantation seems to ensure avoiding any competition with food supply as planting will be restricted to hedges and idle areas (cf. Int. TERI 1). However, the capacity of farmers to bear the risk of waiting several years before first stable harvests are available68 and the economic viability of this model are questioned, as a need for intensive and sound manage-

63 Regarding the academic sector, representatives from four research institutions that conducted studieson Jatro-pha plantations and partly on the processing to JBD took part in the interviews. Additionally to the interviews, recent position papers on Jatropha of the International Crops Research Institute for the Semi-Arid Tropics (cf. ICRISAT 2006 a/b; 2007a/b) and the Tamil Nadu Agricultural University, which is mentioned in many scientific studies, have been analyzed (cf. Ramesh et al. 2007). 64 Cf. Adholeya & Dadhich 2008, 137; ICRISAT 2006b, 1 / 2007a, 4; Kumar et al. 2005, 423; Ramesh et al. 2007, 1. 65 Cf. Adholeya & Dadhich 2008, 5, 197, 224; Kumar et al. 2005, 424; ICRISAT 2007a, 23 / 2007b, 5; Int. MGIAS: in this case, arguments that Jatropha plantations destroy rural livelihoods are confronted with the assumption that these plantations contribute to creating more fodder and fuel wood than uncultivated ‘wasteland’ and therefore strengthen livelihoods of the rural poor. 66 Only few see this as a negative consequence and fear social tensions due to land conflicts caused by privatiza-tion of land (cf. Int. IARI 2); others recommend that the positive effects of ‘wasteland’ reclamation strongly depend on the type of ‘wasteland’ and therefore, a precautious approach is needed, but generally planting Jatropha can-not be seen as an encroachment of land but rather as an upgrading of the area concerned (cf. Int. MGIAS; cf. generally; ICRISAT 2007a, 7, 23 / 2007b, 10; Ramesh et al. 2007, 2). 67 Cf. Adholeya & Dadhich 2008, 137-8, 222; Int. IARI 2 (although this assumption here is limited to alkaline soils), ICRISAT 2006b, 3 / 2007a, 23. 68 Cf. Int. TERI 1; this risk is largely attributed to the fact that there is still much variety in the germ-plasm and therefore, no prediction on yields and oil contents can be made, increasing the risk of failing profits for the far-mers, cf. Int. IARI 2, UoR.

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ment69 as well as economies of scale are assumed to be necessary for a competitive produc-tion of JBD (cf. ICRISAT 2007a, 15; Ramesh et al. 2007, 5). Large-scale corporate farming, which might provide for these economies of scale, is rather seen as negative. A trend to-wards monocultures on large-scale plantations would increase the susceptibility of planta-tions to diseases and pests (cf. Int. IARI 1/2 / MGIAS / TERI 2). Secondly, biodiversity would be negatively affected (cf. ICRISAT 2007b, 8). There is also a debate about the effects of water consumption: while some argue that Jatropha needs less water than other plants in order to grow on ‘wasteland’ (cf. Kumar et al. 2005, 428), or could even contribute to wa-tershed management (cf. Int. IARI 2), others argue that even with low water consumption the already scarce resource of water would come under further pressure (cf. Int. MGIAS)70 and this effect would even increase as soon as companies look for better yields since Jatropha is an input-responsive crop. Therefore, the lack of a standardized sustainable input-output ratio is often cited as a major hazard challenging the economic viability (cf. Int. TERI 2; Ramesh et al. 2007, 5). Thirdly, it is seen as a risk that as soon as companies become the dominating actors in the supply chain, good land of farmers and communities under corporate pressure might be encroached for fuel crops like Jatropha (cf. Int. TERI 1/2 / UoR; Ramesh et al. 2007, 6) and that in this case the rural poor would become marginalized from the income generation process (cf. ICRISAT 2007a, 15-6 / 2007b, 8). Researchers view the lack of sound policies and regulations as a major source for these risks (cf. Adholeya & Dadhich 2008, 166-7; Kumar et al. 2005, 436). Furthermore, there is a debate about the net GHG emissions of JBD production and consumption. Generally, it is agreed that emissions are lower compared to fossil fuels or even to bioethanol (cf. Kumar 2008, 38, 40, 42; Ramesh et al. 2007, 5), but there is a dispute on the overall emissions as these vary regarding produc-tion and processing characteristics (cf. Int. UoR). Some also raise the concern that large-scale production of JBD would lead to problems of disposal or an over-supply of oil cake without having sufficient utilization options available (cf. Ramesh et al 2007, 3). Secondly, it is disputed whether Jatropha is an invasive plant harming the natural local vegetation (cf. Int. IARI 1/2; TERI 1). Some concerns are raised about the toxicity of Jatropha and its long-term and dose-depending impacts on the environment and human health71 as well as on the toxic-ity of methanol applied in the transesterification (cf. ICRISAT 2006b, 26). Regarding the downstreaming part, few point at the advantages of JBD by improving engine performance and contributing to safety issues (cf. Adholeya & Dadhich 2008, 186, 188, 192-4; Kumar 2008, 38).

4.1.1.5 Stakeholder perspectives: banks

NABARD as one of the central providers for funding Jatropha plantation has been included in the interview series as its role is not only to provide refinance to credit institutions especially in rural areas, but also to evaluate and monitor programmes.72 The picture drawn in the in-terview was that, although Jatropha plantations and JBD production contribute to energy

69 The right input-output ratio and proper management practices are seen as sensitive parts to have an economi-cally viable production; it is feared that farmers lack these capacities (cf. Int. IARI 2 / UoR). 70 Furthermore it is argued that in some areas water is of bad quality and can lead to increasing soil degradation. 71 Cf. Int. IAIRI 2 / MGIAS / TERI 2; ICRISAT 2007a, 14; see contrary Int. UoR; Kumar 2008, 38; Ramesh et al. 2007, 5. 72 See for further information on the activities of NABARD: http://www.nabard.org/introduction.asp [5.4.09]


independence, even if the contribution might be rather low, to foreign exchange savings and to a revitalization of ‘wasteland’, there remain many uncertainties. Additionally, CDM was mentioned in the interview as a further income source and thus a potential benefit. Yet, it was assumed to be of minor importance. As a negative consequence it was identified that the JBD business might turn out not to be competitive at the end and the produce therefore not marketable. Main reasons given were the price-sensitivity of the companies, the unstable crude oil price, the varying yields and a need for intensive management of the farms. NA-BARD also raised the concern that due to a gestation period of three to four years under the most common model of contract farming, much of the risk is borne by the farmers, mainly due to the lack of access of the companies to own land. Thirdly, it was criticized that the con-sequences of intensive farming remain unknown and it is feared that this would lead to at-tacks of the Jatropha cultivation by diseases. Some of these perceptions have been con-firmed in other interviews. Generally, there is a slow trend of more banks engaging in the business of financing Jatropha plantations to cover the costs until first yields are available (cf. Int. GRAIN). However, a low commitment of banks to further engage in this activity is felt by various actors due to the assumed concern of banks, that the business might not be eco-nomically viable. Therefore, some companies work out own funding and support mechan-isms (cf. Int. D1-BP / GRAIN / Growdiesel / Mercedes).73

4.1.1.6 Stakeholder perspectives: the picture in the media

First of all, it has to be noted that in the last two years biodiesel and especially Jatropha have been an issue that has been dealt with from various angles in the media analyzed (cf. Shai-lesh 2009, 26). Looking for example at the Hindustan Times, 87 articles have been found applying the search criteria laid out above.74 51 of them had a special reference to Jatropha. Regarding this newspaper there is a trend to only cite government announcements, speech-es and press releases (11/87) and studies about biodiesel in general published by foreign research teams (11/87), while only in recent months more analytical and commenting articles came up. The coverage of the issue in the other media sources analyzed has been lower with a total number of 18 articles but containing in most cases own reports, opinions and analysis.

Referring to the two business magazines analyzed, the picture given about Jatropha as a biofuel source has been over all positive. It is seen as green fuel with better properties than edible oils (cf. Babu et al. 2007), a “ray of hope in providing energy security” (Kumar Sharma 2008) which is seen as being suitable “to tame the oil monster” (Balasubramanyam 2008; cf. Chandramouli et al. 2007), to create employment (cf. Chandramouli et al. 2007), to be a sa-fer fuel than fossil fuel (cf. ibid. 2007), having no negative impact on food security and no allopathic effect on surrounding vegetation (cf. Singh 2008a). However, Jatropha is not con-sidered to be the only option for sustainable energy generation (cf. Babu et al. 2007) and for preventing a global “water world” (Kumar Sharma 2008). The business sector, yet, is viewed

73 This trend is confirmed by other sources looking at the Jatropha business worldwide: “A major challenge for Jatropha projects is related to financing options available. Today, there is widespread reluctance on the part of financial institutions of all hues and shapes to approve projects related to crops and it is necessary to sensitize regional and international financial institutions on the economics of Jatropha.” (Rajagopal 2008, 8) 74 This includes several articles with mandatory publishing from the Mumbai Stock Exchange on company an-nouncement, which have not further been studied.

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to be at risk not being able to develop its full potential due to a lack of government support, be it in the form of the still pending biofuel policy, a lack of subsidies or the lack of land access for companies (cf. Balasubramanyam 2008; Chandramouli et al. 2007; Kumar Shar-ma 2008, Koshy 2007a). Therefore, a repeatedly mentioned risk is that Indian companies will search abroad for options to further expand their Jatropha business (cf. Chandramouli et al. 2007; Koshy 2007a). Additionally, several technological improvements are explained, which are viewed to increase the feasibility of JBD (cf. Koshy 2007b; Singh 2008a/b). In two articles contrary views were provided, one not referring especially to the case of biodiesel in India but to the world wide situation condemning biodiesel as a useless endeavor to fuel the needs of a few rich countries and threatening the world’s water resources (cf. Brabeck-Letmathe 2008). In the other article, concerns are raised that fuel crops will be planted at the expense of food crops (cf. Kaushik 2008). Furthermore, few articles highlight that Jatropha is only one side of a coin, whereas the other is improving energy efficiency (cf. Balasubramanyam 2008).

The media coverage in the Hindustan Times is best described by a quote from one of the most recent articles on the issue at stake:

“Jatropha plant cultivation and subseqequent [sic] production of bio-fuel is a crucial part of India's plan to energy sustainability. [..] In tune with the skyrocketing demand for energy and burgeoning rise of crude oil price, the crying call today is energy security particularly with the voracious demand of energy by the emerging economic powerhouse − India, the Asian tiger economy” (HT 2009).

In this sense, a large majority of articles openly favors the development of Jatropha business as a valuable contribution to maximizing energy security and independence by a diversified energy mix and an enhanced self-sufficiency (cf. HT 2007b/c/f/q/r/w; 2008b/d/g/h). Even though this link is not made in all articles, it is seen as a means to secure economic / indus-trial growth and also the needs of the ever increasing transport sector, which is still fuel-oriented and -dependent (cf. HT 2007o/s; 2008d/e/h). A second strong line of argumentation is the support of JBD to lowering CO2 / GHG emissions. Some even argue that it is CO2 neu-tral and therefore controls environmental pollution as JBD is judged to be a ‘clean’ or ‘eco-friendly fuel’ (cf. HT 2007b/e/g/k/o/v/w; 2008a/f/h). A third line of argumentation refers to the potential of the JBD business, especially the upstream part to foster rural development, par-ticularly by providing new jobs and income opportunities (cf. HT 2007d/h/i/l/n/o/p/v; 2008 a/f/h). A fourth beneficial impact, although mentioned in far fewer cases than the three be-fore, is the contribution of Jatropha to the reclamation of ‘wasteland’ (cf. HT 2007d/n/o/t). Only few complain that the overall economic viability and cost-effectiveness of JBD is not proven and might not reveal in the near future. This is mainly attributed to a lack of research, of a clear policy, of good quality planting material and thereby, varying yields (cf. HT 2007j/m/r/s/u; 2008c).75 News coverage in India Today has been low (four articles) and kept a neutral to positive position as JBD could contribute to reduce emissions or foster sustaina-ble development (cf. IT 2007 a/b; 2008). 75 A recent study conducted exclusively on Hindustan Times reveals that “[m]edia’s position was positive till 2007 when the issue of food price rise became the dominant one and biofuels were criticized. However, this criticism was international in nature and issues raised by anti biofuel actors within India still remain largely unrecognised” (Shailesh 2009, 27).


4.1.1.7 Stakeholder perspectives: public opinion

As mentioned before, the scope of analysis cannot cover a comprehensive picture of the Indian public opinion on large-scale JBD production. Therefore, the following analysis is based on secondary information and information gained in interviews. However, it needs to be noted that most interviewees referred to rural people and farmers while talking about pub-lic opinion. Two lines of argumentation prevail in the interviews: Firstly, general awareness, especially by non-rural people about the issue is seen to be rather low, but favorable (cf. Int. CECOEDECON / GRAIN / TERI 2). This is explained by three factors: the large support by the government and also some NGOs (cf. Int. CECOEDECON), a lack of understanding about possible impacts of biofuels on rural livelihoods (cf. Int. GRAIN) and the fact that no risks, in the sense of large-scale negative impacts, have become visible so far. Secondly, it has been stated that farmers have passed a time of deception as early announcements of Jatropha have been overwhelmingly positive. The plant has been described as being able to grow everywhere without any input and would still deliver sufficient yield. This has led to cas-es in which Jatropha has been planted without the necessary knowledge about planting ma-terial and cultivation procedures, resulting in low or even no yields. Many farmers subse-quently pulled out their plants (cf. Int. DBT / IARI 2 / Medors / Winrock; TERI & gtz 2005, 53). After a phase of 'cooling down' (cf. Int. TERI 1), it is argued that this previous experience has led to a current situation of mistrust of farmers who are less willing now to invest (again) in Jatropha (cf. Int. IARI 2; Gonsalves 2006, 28) as they are uncertain about their own profit (cf. Int. NABARD). Therefore, it would take time to make the people confident and to create awareness and knowledge (cf. Int. TERI 1). Farmers mainly argue to receive a minimum support price for their produce, more certainty about long-time purchase development and some kind of incentives (cf. Gonsalves 2006, 28).

4.1.1.8 Stakeholder perspectives in comparison: dissent or consent?

Following the analysis of different forms of problem framing by the various stakeholder groups, it becomes obvious that there is a dissent on how to frame the issue of large-scale JBD in India. This dissent derives from the fact that there is, on the one side, a dissent on what is generally to be treated as a negative development and what is not. For example, government, companies and largely the media frame energy security and independence to fuel the growth path and industrialization of the Indian economy as a key topic on the agen-da, thereby emphasizing the need to heavily invest in the JBD business.76 This is generally questioned by many NGOs; they argue that India would only follow the wrong growth path of the industrialized nations and that more thinking about sufficiency is needed. A second ex-ample is the issue of ‘wasteland’. Many companies, the government and the media argue that due to Jatropha ‘wasteland’ can be ‘reclaimed’ and can be put under productive use. This view is generally questioned by many NGOs. They argue that this ‘wasteland’ is already used especially by the rural poor who would be further marginalized if ‘wasteland’ is priva-tized or locked up due to Jatropha plantations. They also question the entire concept of ‘was-teland’, as there is no such thing as ‘waste’ land. To illustrate this further, companies and

76 “Energy Security remains the primary reason for opting for bio-diesel. [...] The government hopes to maintain an annual GDP [..] growth rate of about 8% over the next quarter century to meet its goal of poverty eradication”

(Adholeya & Dadhich 2008, 2).

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government argue that Jatropha plantations not being browsed by cattle is a big advantage (cf. e.g. Int. DBT; NANDAN n.d.; NOVOD 2007, II), whereas many NGOs see this as one of the major disadvantages. A third example is the case of water consumption. Companies ar-gue that low water requirements of Jatropha are an opportunity to grow it even in areas with low rain fall, whereas NGOs and also some researchers argue that even if the water con-sumption is low, water is consumed, which is then lacking to grow other (food) crops and would further stress the already scarce Indian water resources.

Furthermore, there is also dissent on the evidence available to judge risks. For instance, it is generally agreed that GHG emissions need to be lowered in order to mitigate further climate change. However, even companies question whether data available so far represent the full picture of GHG emission for the JBD life cycle. Therefore, it is questioned if and to which extent JBD contributes to an emission reduction and can be treated as a ‘clean fuel’. The major dissent however is on the economic viability of JBD. Slowly the government recog-nized that its initial very favorable calculations did not materialize and that prices calculated do not correspond with the prices paid at the market. Therefore, questions remain, firstly, whether farmers should engage in the business as pay-back periods for high initial invest-ments might turn out to be too high, and secondly, whether it would be worth for companies to continue investing in the business. Interviews have also revealed dissent on the evidence of the amount of ‘wasteland’ available. Cases of consent can only be identified if just a set of stakeholder groups is taken into account, e.g. government, industry and media agree on the issue of energy security and independence or rural employment generation (cf. also Shailesh 2009, 28-9). Furthermore, the results support the perspective of Shailesh (2009, 30) that the

“[p]ro biofuel discourse has been able to exert hegemony over anti biofuel discourses, which is evident from the institutionalisation that has happened at the state level and the non-recognition of anti biofuel discourse by the central government.”

The IRGC-RGF also inquires about the general choice of frame (risk, opportunity or fate). So far, the view gained from the interviews and the literature analyzed is that what some see as an opportunity is judged by others as a risk, e.g. the genetical variety of the plant is treated by some as risk for its economic viability, by others as an opportunity to further improve plant characteristics and identify high yielding plants. None of the issues mentioned seem to be treated as fate, as in most cases risks are evaluated to be a question of more technical re-search, the design and effective implementation of better policies, regulations and standards. To conclude, issues identified in the problem framing process are summarized in Table 9.


Table 9 Issues of problem framing (Source: Own compilation).

Potential positive conse-quences

Issue area Potential negative consequences

− Increased rural development, employment & livelihood generation

− No food competition

− Reduction of particulate mat-ter

− Safety of fuel improved

Soc

ial

− Social tensions over ‚wasteland‘ issue, land grab, alienation of the rural poor from ‚wasteland‘

− Food competition

− Destruction of pastoralism

− Employment loss

− Intoxication (Jatropha & Methanol)

− Reclamation of wasteland

− Increase energy security & independence

− Ensure economic growth

− Foreign exchange savings

− CDM income generation Eco

nom

ic

− Non-marketability of JBD, business failure

− Income loss for farmers

− Unsustainable growth path (just ‚more energy consumption‘)

− Abandoning of 1st generation biofuels

− Emission reduction com-pared to fossil fuels, carbon sequestration

− Soil improvement

− Afforestation

− No (uncontrollable) diseases or pests

− Water conservation Eco

logi

cal

− Water scarcity / overexploitation of water resources

− Negative net emission balance (LC-perspective)

− Loss of biodiversity

− Diseases and pests

− Allelopathic effect on soil, suppression of local vegetation

In order to draw a comprehensive picture of positive and negative consequences, the results need to be cross-checked with external sources in terms of foreign risk analysis on biodiesel and especially JBD. The case of JBD has already attracted the interest of researchers from various disciplines outside India (cf. Shailesh 2009, 23); their recent publications paying spe-cial attention to large-scale JBD in India and also other countries are taken into account at this stage.77 Following this analysis, the picture of problem framing is largely confirmed. But it 77 Research taken into account at this stage includes: Altenburg et al. 2009 examining the impact of JBD on rural development in terms of income and employment generation, participation and empowerment, environmental impact, food security and economic viability; Doornbosch & Steenblik 2007 look at the general picture of biofu-

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is highlighted, that risks and benefits “vary greatly depending on the type of value chain or-ganization to be promoted” (Altenburg et al. 2009, 1; similarly IFEU 2007, 27).

4.1.2 Existing risk and hazard screening activities in India

The aim of this section is to pay attention to existing systematic activities to assess risks and benefits related to this issue (screening, early warning, risk monitoring) as well as their defi-cits and on methods that are used to select risk reduction options.

Already in its 2003 biofuel report the Indian PC shed light on the possible environmental im-pacts of biodiesel, referring mainly to the emission levels of different blends and to the emis-sion of particulate matter. Based on US-studies and on Indian company studies it was con-cluded that biodiesel is not only a clean, but also a non-toxic and safe fuel (cf. PC 2003, 97-100). In this report it was briefly acknowledged that from a life-cycle perspective biodiesel in general would lower GHG emissions without further specifying details of the analysis (cf. ib-id., 103). The following recommendations for further investigations of biodiesel were there-fore limited to demand more research on different TBOs, the development of fuel standards and test methods, assessment of oxidation stability, work on toxicological studies and elabo-ration of emission norms (cf. ibid., 104-5, 134). Concerning socio-economic aspects, it was assumed that, especially since planting and harvesting JBD is a labour-intensive task, em-ployment for the rural poor would be generated. Cost calculations have been made up rely-ing mainly on data from other countries and coming to very favorable results (cf. ibid., 115, 117). In the subsequently proposed NMB two phases were foreseen, each containing differ-ent micro-missions (cf. ibid., 119) in order to set up the necessary infrastructure for JBD and an institutional structure for its coordination and execution (cf. ibid., 128 et sqq.):

− Phase I Demonstration project 2003-07: Micro-missions on a) plantation on forest lands via JFM committees, b) plantation on non-forest lands with NOVOD78 as the nodal agen-cy, c) plantation on other lands (degraded / wasteland) applying schemes of the MoRD79 and giving rural communities first right of access to the oil for their own use, d) procure-ment of seed and oil extraction, e) transesterification, blending and trade and, lastly, f) research and development with several focus areas: raw material improvement, perfect-

els; FACT 2006 issued a handbook on Jatropha analyzing its properties and giving recommendations for cultiva-tion; FAO 2008, a recent study on biofuels, its risks and opportunities paying special attention to the food issue and examining among others the case of Jatropha; Francis et al. 2005, who executed a study on the potential of Jatropha to simultaneously reclaim wasteland, produce fuel and provide for socio-economic development of rural areas; GEXSI 2008, a study commissioned by the WWF on the current stage of the Jatropha industry worldwide; Gonsalves 2006, who did an assessment of the Indian biofuels industry commissioned by the United Nations Conference on Trade and Development; IFEU 2007, who did a life-cycle assessment on the case of Jatropha biodiesel in comparison to conventional fuels for different production scenarios; Jongschaap et al. 2007 ana-lyzed different claims and effects on Jatropha with special reference to the Indian case and also to different appli-cation scenarios. Additionally, the recent effort of the RSB (RSB 2008) to develop standards as a response to the risks perceived by a large-scale propagation of biofuel projects all over the world, have been taken into account although not specifically referring to JBD. 78 Since 2004, NOVOD therefore finances a research network of more than 40 institutions on TBOs with a special focus on high quality planting material, the development of high quality varieties, best-practice development of cultivation including as well as inter-cropping and multi-location trials, and detoxification activities (cf. Altenburg et al. 2009, 52-53; Int. MNRE; NABCONS 2006, 10-11). In one or two years NOVOD foresees to publish area / region / state wise recommendations on intercropping (cf. Int. NOVOD). See for an overview on NOVOD spon-sored research activities NOVOD 2008. 79 MoRD as the nodal ministry on the national level has been assigned the task of working out an operational plan for the demonstration phase (2006/7), different plantation models for different agencies (individuals, corporates, panchayats, GoI depts.) and of establishing a national nursery network (cf. NABCONS 2006, 11).


ing production technology, application of biodiesel as fuels (including tests on technical properties, toxicity) with a strong role of the Council of Scientific and Industrial Research (CSIR) (cf. ibid., 119-123).

− Phase II Self sustaining expansion of biodiesel programme 2007-12: for this phase it was assumed that farmers would be already sufficiently attracted to carry out Jatropha planta-tions and therefore, the main focus laid on how fund raising of each activity of the value chain can take place (cf. ibid., 125).

The analysis for the years following this report shows that governmental organisations, pub-licly sponsored research institutions and some companies have a strong focus on the tech-nical and thereby economical improvement of the upstreaming process with the aim to stabil-ize and enhance the yields in terms of output per ha, oil content of seeds and oil quality.80 An unstable and low productivity of Jatropha is seen as one of the major hazards hampering the economic viability of JBD and therefore causing the risk of non-marketability of the whole produce. Hence, various trials have been conducted starting five to six years ago. Different types can be distinguished:

− Research on the germ-plasm and genetic variability of the plant, with the aim to identify superior germ-plasm that bears high yields, a high oil content and in some cases other favorable characteristics like being more drought and pest resistant. The DBT for exam-ple carried out a micro-mission on the production and demonstration of Quality Planting Material of Jatropha (cf. Adholeya & Dadhich 2008, 17-21; Int. DBT / MNRE). Additional-ly, the Council of Scientific and Industrial Research (CSIR) (cf. Adholeya & Dadhich 2008, 22; Int. MNRE; Kumar Sharma 2008), D1 (cf. Quinn 2005, 6), IARI (cf. Int. IARI 1/2), ICRISAT (cf. ICRISAT 2006b), Reliance (Singh 2008a), and TERI (cf. Adholeya & Dadhich 2008, 14; Int. TERI 2) are active in this field.

− Establishment of research protocols as well as testing and cultivation standards, see DBT (cf. Adholeya & Dadhich 2008, 17-21; Int. DBT) and of plant passports to store identified key plant material and their characteristics, e.g. by the National Bureau for Plant Genetic Resources (cf. Int. DBT); UBB also set up a gene bank to guard high-yielding seed varie-ties (cf. HT 2007x).

− Multi-propagation methods with the aim to identify most suitable ways of producing more high-quality seeds at a reasonable price. Many research institutes and private companies are currently heavily investigating on tissue culture propagation as the plants being raised from stem cuttings and also from seeds are seen to have too many limitations and cause too much variation in the yields.81

− Establishment of nurseries to raise quality planting material (QPM), e.g. by DBT (cf. Int. MNRE), D1-BP Biofuels (cf. Int. D1-BP), Mission Biofuels (cf. Int. MB).

80 Also Kaushik reaffirms that “the priority R & D efforts in India focus on: To enhance the availability of the quality raw material; Selection and development of high yielding varieties; Improving the process of production of biodie-sel; Utilization of by-product for enhancing the economical viability of the project” (Kaushik 2007, 6). This view is also reaffirmed by Shailesh (cf. 2009, 26). 81 See for example research activities of DBT (cf. Adholeya & Dadhich 2008, 17-21; DBT 2006; Int. DBT), Medors (cf. Int. Medors) or Labland Biotech Pvt. (cf. Singh 2008b).

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− Multi-location trials to test the adaptability of the plant under various climatic conditions (temperature, rain fall, soil etc.), e.g. DBT started its trials in 2006/7, but with no results available so far (cf. Int. DBT), similarly TERI started a project on multi-location trials ex-pecting results in 2011/2 (cf. Int. TERI 2). Among companies D1-BP Biofuels is conduct-ing multi-location trials (cf. Int. D1-BP).

− Research on the most competitive and economically viable input-output ratio and planta-tion models. See e.g. IARI’s activities, which have partially been abandoned since yield results were seen as disappointing (cf. Int. IARI 2), or those of Medors (cf. Int. Medors).

− Improvement of the productivity of the oil extraction and transesterification processes, carried out for instance by DBT (cf. Adholeya & Dadhich 2008, 17-21), CSIR (cf. Kumar Sharma 2008), Indian Institute of Petroleum (IIP) (cf. Adholeya & Dadhich 2008, 31), the Indian Institute of Chemical Technology (IICT) (cf. Koshy 2007b), and several universities like Punjab Agricultural University (cf. Adholeya & Dadhich 2008, 31).

− Tests of other TBOs: although Jatropha is the preferred plant, tests of other TBOs like Neem or Pongamia are carried out for example by DBT (cf. Int. MNRE), IIP (cf. Adholeya & Dadhich 2008, 31) and NOVOD sponsored research centers (cf. NOVOD 2008).

It is assumed that by a commercialization of the by-products generated in the process of JBD production, especially Glycerol and oil-cake, the price of Jatropha can be reduced, streng-thening Jatropha’s competitiveness and avoiding the risk of non-marketability. In this sense, ways of improving the quality and finding new applications for the by-products are tried to be found:

− research on the characteristics and quality of by-products is for example done on the detoxification of the oil-cake to broaden its utilization options (cf. Int. NOVOD);

− research on new applications of by-products is carried out, for example by CSIR (cf. Ku-mar Sharma 2008), as well as

− research on possible intercropping methods and plants, done for instance by IARI (cf. Int. IARI 2), ICRISAT (cf. ICRISAT 2006b), Reliance (cf. Singh 2008a), TERI (cf. Int. TERI 2), and TOIL (cf. TOIL n.d.).

The MNRE recently commissioned the Confederation of Indian Industry with a study on im-proving the economics of JBD (cf. Int. MNRE). There are also several attempts to gather all the information produced during these years and to make it publicly available, like the Petro-leum Conservation and Research Association’s (PCRA) website www.pcra-biofuels.org (cf. Adholeya & Dadhich 2008, 21; NABCONS 2006, 14).

Additionally, NGOs and partly private research institutions (some sponsored by JBD processing companies) are active in conducting research on the JBD issue, broadening the view of hazard and risk screening by analyzing the socio-economic as well as the environ-mental impacts of a large-scale Jatropha production in India. To cite a few examples:

− CECOEDECON started an in-depth study on the impacts of Jatropha on ‘wasteland’ and on the farmers in 2008; the study is limited to the state of Rajasthan (cf. Int. CECOEDE-CON), in the same direction NAVDANYA carried out a study on the social, economic and


ecological impact of Jatropha cultivation for biodiesel in India, especially on its effects on the livelihoods of the rural population, on food security and on land issues by conducting case studies mainly in Chhattisgarh, Rajasthan and Maharashtra as being among the states supporting Jatropha plantations (cf. Navdanya 2007; Shiva 2008).

− ICRISAT is engaged in developing a participatory business model involving local pan-chayats and SHGs as well as in training local farmers in order to use the biodiesel indus-try for a more pro-poor growth oriented approach. ICRISAT also investigates on various intercrops, to broaden income generation from Jatropha plantations.82 Under the new BioPower Initiative launched in 2007 ICRISAT aims at studying environmental benefits and risks and providing guidance on how to minimize potential harm (cf. ICRISAT 2007b), and secondly, to

“carry out socio-economic studies of risk issues related to pro-poor bio-energy develop-ment, leading to risk management strategies and policy advice to decision-makers” (ICRI-SAT 2007b).

− TERI developed a risk assessment for all stages of the JBD production chain and fur-thermore started a BP sponsored trial plantation in Andhra Pradesh amounting to 8,000 ha on private ‘wasteland’ of farmers and under different plantation models. Project results will not be available before 2012. The project serves several purposes:

• conducting an environmental and social impact assessment of the entire value chain and a life cycle assessment for GHG emissions and

• optimizing the land use by mixing it with horticulture without a replacement of already existing horticulture systems (cf. Adholeya & Dadhich 2008, 16-17, 36-37; Int. TERI 1/2).

Similarly, Daimler commissioned a LCA and an assessment of environmental impacts of JBD in India (except effects on land quality, biodiversity and water consumption) carried out by the Institute for Energy and Environmental Research Heidelberg (IFEU), which was supported by DEG Germany, the University of Hohenheim and the Central Salt & Marine Chemical Research Institute India (CSMCRI) (cf. IFEU 2007).83

− PRAYAS studied the economics of Jatropha plantation to develop different pay-back models for farmers (cf. PRAYAS 2006).

Some public agencies, like NOVOD, are now following these broader approaches, for in-stance NOVOD initiated a programme at the end of 2008 on the socio-economic viability of Jatropha together with IIT, Delhi, apart from broadening its training activities for farmers (cf. Int. NOVOD).

Many of these research endeavors are still in an early stage and in some cases reliable re-sults are not yet available. Therefore, as seen in the chapter on the researchers’ perceptions,

82 Cf. ICRISAT 2006b; similarly, the state of Karnataka is currently elaborating together with the University of Agricultural Science in Bangalore a new business model with the aim to create a cooperative model, that allows these cooperatives to control more of the value adding parts of the value chain including the transesterification process (cf. Altenburg et al. 2009, 66). 83 Apart from that, DAIMLER carried out a pilot study with CSIR and CSMCRI on energy budgeting (energy input / output ratios of plantations under different climatic conditions) for Jatropha (cf. Francis et al. 2005, 22).

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many recommend following a more precautious approach regarding large-scale production and to wait until more reliable long-term data and better quality planting material is available.

4.1.3 Interim conclusion

Regarding the findings on the pre-assessment it can be summarized that

− the problem framing analysis has disclosed very heterogeneous views on the issue of large-scale JBD in India and that these views are not only derived from a dissent on evi-dence but also from a dissent on the goals of selection rules (i.e. the case of ‘wasteland’ use). However, risks identified seem to be consistent with state of the art knowledge on biodiesel related risks.

− Regarding existing risk and hazard assessment and screening activities there is a divide between activities pursued by public and non-governmental institutions. Regarding the former, screening activities are in place, but largely concentrating on the known risks and technical issues of the JBD production process itself, whereas the latter, together with some researchers and partly companies, try to see the broader picture by looking at the impacts of the entire JBD system on the environment and the social groups involved, tak-ing into account and comparing also experiences made in other countries (cf. e.g. Shiva 2008, SPWD 2008). By doing so they try to act as ‘early alerter’, although foreign expe-riences might not be totally transferable to the situation in India due to different feedstock and land use patterns.

Even if some of the dissents on risks rather seem to appear between governments and

NGOs, they pose a serious threat to the license to operate for companies if conflicts emerge

from these dissents. Therefore they must be carefully observed by corporate risk managers.

For example, if the dispute about the understanding and use of so-called ‘wasteland’ intensi-

fies further, companies gaining land from state governments will come under pressure. Fur-

thermore, as explained above, many farming models depend on the support of local farmers,

therefore, doubts about the economic viability and ecological consequences raised by NGOs,

farmers and the research sector must be carefully taken into account.

4.2 Risk appraisal

The analysis of risk perceptions, of risk and hazard screening activities, of current state and central policies as well as of value chain patterns already revealed many possible variables relevant for the system, in which the case ‘large-scale JBD production’ is operating (see An-nex 7). These all have been taken into account in a first step as it is important to include a broad set of variables, including some degree of redundancy or complementarity. Further-more, variables will be refined in a second step and indicators (i) are included to further spe-cify a variable. To increase the feasibility of the following scenario construction, it is recom-mended to integrate overlapping or closely related variables (cf. Wiek & Lang 2008, 36) and, as a prerequisite for the following formulation of projections, to use neutral descriptions of variables (cf. Jänicke 2007, 63). This leads to a condensed set of variables (Table 10).


Table 10 Variables JBD system84 (Source: own compilation). Po

litic

al &

regu

lato

ry

demand side policies and laws (i: liability of blending targets, minimum support price, purchase prices, taxation, SVO and JBD export regulation)

13 AV/StV/eV

supply side policies and laws (i: land use rules and allotment; input and processing subsidies / restrictions, funding schemes, employment requirements, feedstock import regulation)

14 AV/StV/eV

CDM admissibility (i: income from CDM for Jatropha plantation and JBD use)

15 SV/StV/iV

84 One needs to take into account that some variables could belong to more than just one sphere and that over-laps between spheres, e.g. between the social and economic sphere for ‚rural development‘, exist. 85 Explanation of abbreviations used: AV = actional variable, MV = modal variable, RV = rate variable, SV = struc-tural variable, StV = state variable, iV = internal variable, eV = external variable; see also Table 11.

Sphere Variable (indicator) # Type85 Ec

onom

ic

costs of input and processing (i: price) 1 SV/StV/iV

competitive strengths JBD vs. fuels (i: price ratio, cost-effectiveness)

2 MV/StV/eV

energy / fuel demand (national, i: consumption) 3 AV/StV/eV

marketability of by-products (i: applications, recovery price) 4 MV/StV/iV

amount of JBD production in national fuel supply (i: quantities) 5 SV/StV/eV

energy security (i: national production import gap, diversification) 6 SV/StV/eV

international supply security of fuels and energy (i: extraction, foreign consumption, price, global economic development)

7 SV/StV/eV

Soci

al

risk perception patterns of experts and public opinion 8 AV/StV/iV

food accessibility and availability (i: price and quantity) 9 MV/StV/eV

wasteland use patterns / accessibility (i: pastoralism, no use, subsistence agriculture)

10 AV/StV/eV

rural development (i: livelihood, employment) 11 MV/StV/iV

participation of rural community representatives (i: decision mak-ing structures, inclusiveness for Panchayats, SHGs, NGOs)

12 MV/StV/iV

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international laws and regimes (i: trade regimes, Kyoto, sustai-nability standards)

16 AV/StV/eV Ec

olog

ical

environmental conditions and availability of natural resources (i: rain / water, climate, land, soil fertility, biodiversity)

17 SV/StV/eV

emission level JBD (i: total emissions during life cycle) 18 SV/StV/iV

toxicity of inputs of JBD production (i: plant itself, chemicals) 19 SV/StV/iV

plant diseases and pests affecting Jatropha 20 SV/StV/eV

Tech

nolo

gica

l

R&D on planting and processing (i: intensity, innovations, i.e. productivity improvement, detoxification, new applications)

21 MV/rV/iV

plantation patterns (i: mono- vs. intercropping, density: hedges, block; land type used)

22 AV/StV/iV

input needs of JBD life cycle (i: amount of water, energy, fertiliz-er, chemicals, labour, other inputs)

23 SV/StV/iV

availability of QPM (i: yield, oil content, quantity, agronomic cha-racteristics)

24 MV/StV/iV

marketability of 1st generation substituting technologies (i: 2nd and 3rd generation fuels availability and costs)

25 MV/StV/eV

value chain structure (i: degree of vertical integration and centra-lization; risk distribution)

26 AV/StV/iV

Furthermore, all variables have undergone an assessment before their inclusion in the matrix against an adequacy and sufficiency analysis. This implies that “the final set of variables does not objectively represent the system but does represent it adequately and sufficiently to answer the given research question” (Wiek & Lang 2008, 34).

Regarding adequacy, variables selected have been checked against four criteria. They must (1) serve the aim to describe the system in quantitative or qualitative terms, (2) be alterable, (3) be within the boundaries of the system and (4) be of importance for the future develop-ment of the system (cf. ibid., 32, 34-5). The second criterion, sufficiency, controls the degree by which general systematic characteristics are described by assessing variables against three indicators (see Table 11).


Table 11 Indicators of sufficiency analysis (Source: Own table based on Wiek & Lang 2008, 35).

Criteria Description Result

Formal re-presenta-tion

Number and ratio of:

a) structural (SV), modal (MV, social capacities), actional va-riables (AV, activities, i.e. policies, initiatives, behavior),

b) state (StV, measurable at a specific time) & rate variables (RV, measurable over a specific period)

Total variables: 26

Comment: Wiek & Lang (2008, 36) rec-ommend an average of 20 variables

a) SV: 10, AV: 8, MV 8,

b) Comment: The dominance of state variables is considered as tolerable, as many of StV can also be treated as RV and projections will look at variations over time

Thematic representa-tion

Number of variables in each sub-system

Economic: 7, social: 5, political & regula-tory: 4,

ecological: 4, technological: 6

Comment: the number of variables is fairly balanced

Relation representa-tion

Number and ratio of internal (con-trollable, iV) and external (hardly controllable, eV) variables,

(controllability refers to capacity of Indian stakeholders, especially business sector, as later on man-agement options for this sector will be generated)

iV / eV = 13 / 13 (Comment: balanced)

Comment: indications must rely on most plausible assumptions; however, decid-ing on the controllability is often difficult due to the multiple factors influencing a variable (e.g. the influence of business on regulations) and depends on the agent who exerts the control

These variables will undergo further assessment regarding their impact on the system, and their interaction between each other. Therefore, unidirectional direct impacts between va-riables will be assessed applying an impact matrix and a scale ranging from ‘0’ (no impact) to ‘3` (very strong impact). Qualitative information on the type of impact is taken from the expert interviews and literature research86.

The results of the cross-impact analysis (see Annex 8) of the different variables is displayed

and integrated in the following system grid. The system grid shows (Figure 5), by ranking the

variables, which ones are ‘active’ (section ‘A’ and partly ‘B’), i.e. they strongly influence other

variables and are therefore, linked to the independent set of variables. Secondly, the grid

includes ‘passive’ variables (section ‘E’ and partly ‘D’ and ‘F’), which are strongly influenced

86 Literature analyzed includes: Doornbosch & Steenblik 2007; D’Souza & Peretiatko 2002; FACT 2006; FAO 2008; FAO & OECD 2008; IFEU 2007; GARP 2009; Schmidhuber 2007; Shailesh 2009; TERI & gtz 2005.

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by other variables and therefore have to be seen as dependent variables. Thirdly, ‘ambiva-

lent’ variables can either strongly influence or be strongly influenced (section ‘C’, partly ‘B’

and ‘D’), whereas, fourthly, ‘buffering’ variables stabilize the system, as they are only slightly

influential or influenced (section ‘G’ and partly ‘F’ and ‘H’) (Wiek & Lang 2008, 38). Out of the

sections ‘H’ and ‘F’ ‘intervening’ variables can be identified.

Figure 5 System grid (Source: Own graph based on the software SCMI Scenario Manager 4.0).

Following the cross-impact analysis and the results displayed in Figure 5, prior assumptions

on the quality of different variables being dependent, independent or intervening are largely

confirmed. While regarding the creation and transformation of risks, judged as dependent

variables, most of the related variables are to be found in the respective section ‘E’ (like

‘competitive strengths JBD vs. fuels’ (2) ‘energy security’ (6), ‘food security’ (9), ‘rural devel-

opment’ (11)), others are among the ambivalent variables (e.g. the ‘environmental conditions’

(17)) pointing at their double-sided nature, as in this case the environment (17) is not only a

risk target of JBD related hazards but also an important source of influence for the develop-

ment of other risks (e.g. ‘food security’ (9)). ‘Policies’ and ‘laws’ (13, 14) and production re-

lated characteristics (22, 23, 26) are mainly in the field of independent variables (sections ‘A’

and ‘B’, partly in the more ‘active’ parts of ‘C’). Regarding assumed intervening variables

some adjustments seem necessary, as some seem to have a stronger impact on the system

than previously assumed (e.g. ‘energy demand’ (3), ‘R&D’ (21) / ‘marketability of 1st genera-

tion substituting technologies’ (25)). This adjustment will be tested in the subsequent steps to

avoid modeling errors.

The system grid, furthermore, does not show an overlapping of variables. Therefore, a fur-ther integration of variables is not deemed necessary. Moreover, the grid shows that some


variables (especially buffering, section ‘G’ and partly ‘F’ and ‘H’) are of minor importance and can therefore be left out from the further analysis (cf. Wiek & Lang 2008, 39). Thus, variable 15 (‘CDM admissibility’) and 16 (‘international laws and regimes’) will not be included in the further analysis. Similarly, risks identified as strictly dependent variables will be taken out and analyzed individually in the following RAPs together with further risks that have not been in-tegrated in the cross-impact analysis in the previous step. In a third step, based on the fur-ther consolidated set of variables, projections for the variables will be elaborated. These can be either quantitative or qualitative. Projections demonstrate how a variable can develop in the future. Wiek & Lang (cf. 2008, 42-3) recommend a maximum of 15 variables and a max-imum of three projections for each variable, preferably showing a high degree of distinction, but without any need to set the same amount of projections for each variable (Table 12).

Table 12 Scenario analysis: projections (Source: own compilation).

Variable Projection

V 3) Energy and fuel demand (focus: fuel)

V3a) increase: along with expected population and economic growth, 112 Mio. t diesel needed & 3rd largest consumer of transportation fuels, both by 2020 (Francis et al. 2005, 13; Kaushik et al 2007,1; TERI & gtz 2005, 40, 75)

V3b) constant: high energy costs & economic downturn: demand stable (TERI & gtz 2005, 74)

V 4) Mar-ketability of by-products

V4a) remains favorable (broad application & high recovery price, e.g. glycerol for cosmetics at 40 – 60 Rs/kg) (Chandel et. al 2007, 375; Gonsalves 2006, 24, 29; HT 2007g/y)

V4b) drastically declines (oversupply of by-products – price dump, no new appli-cations) (Adholeya & Dadhich 2008, 137; Gonsalves 2006, 24; NABCONS 2006; PC 2003, 133)

V 5) Amount of JBD pro-duction in national fuel supply

V5a) pessimistic: Amount remains insignificant in absolute and relative terms 1 Io t / yr (Francis et al. 2005, 21, TERI & gtz 2005, 37; in line with global forecast: FAO 2008, 43-4)

V5b) medium: Government projection: 3,3 Mio. t until 2012 / 5,6 Mio. t until 2021 for 5% blend (Kaushik et al. 2007, 308)

V5c) optimistic: Government projection: 6,6 Mio. t until 2012 / 11,2 Mio. t until 2021 for 10% blend (Kaushik et al. 2007, 308)

V 7) In-ternation-al supply

V7a) high price - supply gap: shocks on supply side (political conflicts; export restrictions) together with a re-acceleration of economic growth and high prices (EIA 2009, 30, projection 2030)

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security of fuels and energy

V7b) stable: new explorations and new technologies keep energy scenario sta-ble; (GARP 2009, 47-8, 55, 57); energy prices remain at current (low) levels due to economic cool down (inherent logic) (at least within the forecast period)

V 8) Risk percep-tion of experts / public opinion

V8a) Jatropha as sustainable energy solution – risk perceptions and public opi-nion will turn overwhelmingly positive (intuitive approach)

V8b) will remain at current heterogeneous level (trend continuity)

V8c) Jatropha as a fraud: risk perceptions and public opinion will turn dominantly negative (intuitive approach)

V 12) Par-ticipation of rural communi-ties

V12a) inclusive: high level of internal democratic accountability of Panchayats and stronger respect for self-governance rights (e.g. PESA Act) leads to strong inclusion (trend extrapolation);

V12b) exclusionary: weak institutionalization, representativeness, low mobiliza-tion power of PRI & civil society (intuitive approach following critics by Altenburg et al. 2009, 45)

V 13) Demand side poli-cies and laws

V13a) pro-Jatropha policies will dominate: mandatory blending goals, low mini-mum support price for seeds, but high subsidies for farmers, higher purchase prices JBD, no/low taxation, liberal SVO and JBD export regulation (transfer from EU system)

V13b) mixed Jatropha policies with no clear direction towards pro- or contra-Jatropha, union policy will not overcome divergence in state policies (trend extrapolation)

V13c) shrinking policy support: due to change of political priorities (intuitive ap-proach)

V 14) Supply side poli-cies and laws

V14a) pro-Jatropha policies will dominate: corporate and large-scale plantation-favoring land use and allotment rules; high input and processing subsidies /funding schemes, feedstock import regulation in place to protect local cultivation (intuitive approach)

V14b) mixed Jatropha policies with no clear direction towards pro- or contra-Jatropha, union policy will not overcome divergence in state policies (trend extrapolation)

V14c) shrinking policy support: due to change of political priorities (intuitive ap-proach)

V 17) En-vironmen-

V 17a) improved: strong efforts and priorities for environmental protection ease pressure on natural resources and reduce degradation (intuitive approach)


tal condi-tions and availability of natural resources

V17b) constant: change in environmental conditions will not be severely mate-rialize in projection period (intuitive approach)

V 17c) worsened: overall environmental condition in India will worsen (D’Souza & Peretiatko 2002); climate change reduces rainfall, already scarce resources under further pressure (transfer from forecast for South Asia; FAO 2008, 63); loss of arable land (trend extrapolation: amount of non-arable land: from 112 Mio. ha in 1952 to 174 Mio. ha in 2000; Francis et al. 2005, 17);

V 19) tox-icity of JBD in-puts

V19a) unchanged: not economically viable or technologically feasible to detoxify inputs or change toxic inputs (e.g. methanol) (Jongschaap et al. 2007, 15-6)

V19b) reduced due to a substitution of inputs / detoxification technologies (intui-tive approach)

V 20) plant dis-eases and pests af-fecting Jatropha

V20a) increasing: new diseases / pests will affect with broad impact (e.g. by transfer into new areas, new plantation models) (trend extrapolation from: Ach-ten et al. 2008; DDS 2007)

V20b) controlled: diseases / pests are documented, effective pesticides (chemi-cal and from other plants) are available (trend projection based on Lele 2005, 139; Quinn 2005, 29).

V20c) decreasing: more disease- and pest-averse seeds are applied (intuitive approach)

V 21) R&D on planting &processing

V21a) massive investigation on optimizing Jatropha cultivation and production process continued (trend extrapolation)

V21b) loss of interest: investigation only done by few researchers, no systematic / coordinated approach (intuitive approach), no technological breakthrough (Doornbosch & Steenblik 2007, 21)

V 22) Plantation patterns

V22a) intensive: Dominance of high density mono-block-plantations, ‘>2,000 plants/ ha’ on larger areas (intuitive approach)

V22b) medium: Dominance of medium density block plantations (<1,500 plants/ha) with space for intercropping on medium size land patches (intuitive approach)

V22c) low concentration: Dominance of hedge plantations, micro-block planta-tions (1-2ha) or inclusion in agro forestry systems with low plant density (GEXSI 2008, 35)

V 23) In-put needs

V23a) intensive: high needs for irrigation, fertilizer, maintenance (trend continui-ty)

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of JBD LC V23b) extensive: no or low irrigation, no extra fertilizer, low maintenance (intui-tive approach)

V 24) Availabili-ty of QPM

V24a) low or nil: superior accession of Jatropha is not to be found or remains limited in its genetic advantages to certain climatic zones (Jongschaap et al. 2007, 25)

V24b) upgrading: extensive research on accessions and GM make QPM availa-ble (intuitive approach)

V 25) 1st genera-tion subs-tituting technolo-gies

V25a) innovation jump: 2nd generation biofuels will be available within the next years at very competitive prices (TERI & gtz 2005, 11)

V25b) technology for the 22nd century: large-scale availability of next generations fuel will need time before entering the market (Chandel et. al 2007, 374; Doorn-bosch & Steenblik 2007, 5, 11)

V 26) Value chain structure

V26a) highly centralized: cultivation and processing in large-scale units, high degree of vertical integration of value chain (transfer from Asian projection, GEXSI 2008, 35)

V26b) decentralized: diverse cultivation models and small, decentralized processing units; low degree of vertical integration(intuitive approach)

A consistency analysis (see Annex 9) led to a total number of 35,000 possible scenarios with a maximum consistency of 156. In this thesis only those scenarios have been analyzed whose consistency degree is not below 90% of the maximum (254 scenarios remained with consistency degree ≥ 140, see Annex 10). Out of these, two scenarios showing a high de-gree of divergence have been selected for a deeper analysis. The first scenario labeled ‘agro-business’ (consistency value: 148). It is characterized by a high national need for ener-gy while external shocks and demands have led to high prices and a supply gap for oil. Due to massive research efforts it has been possible to develop less toxic quality planting material with lower input needs that is also less susceptible to pests and diseases, and to find broad applications for the by-products. Within this scenario, Jatropha is fostered by clear pro-Jatropha demand and supply side policies, which strengthen the feasibility to plant it on large-scale, mostly corporate plantations as part of a highly integrated value chain. Due to the fact that environmental changes are not directly perceived and linked to Jatropha in the forecast period and due to the improvement of yields the all-over risk perception is favorable, although participation of rural communities is weak. Pressure from next generation fuels is low as they are not marketable yet.

A contrasting scenario is labeled ‘Jatropha in the niche’ (consistency value: 142). It is charac-terized by the overall amount of Jatropha remaining low in absolute and relative terms. Al-though the national energy demand keeps increasing, the international supply situation has


stabilized and next generation fuels start entering the market. The perception of Jatropha still divides the country, reflected also by missing clear and union-wide binding policies fostering Jatropha. Massive research has made most diseases and pests at least controllable and has also improved the quality of planting material, though the problem of toxicity remains un-solved, and input needs remain high stressing the already worsened environmental condi-tions in the country. The value chain is rather decentralized and plantation patterns do not exceed medium size plantations.

4.2.1 Risk assessment for Jatropha

Following the system analysis and scenario construction, which revealed two differing scena-

rios, risks will now be further assessed regarding the criteria stipulated in chapter 2.4 and

elaborating a RAP for each of the risks.87 Starting with issues in the social sphere, the three

most prominent differing risk perceptions have been, whether a large-scale JBD production

can increase rural development in terms of generating employment (see Table 13), whether

it alienates the rural poor from the wastelands and which effect it will have on food security.

87 Risks being perceived as the opposite of each other (e.g. JBD produces no harm for food security vs. JBD contributes to jeopardize food security) will be dealt within one RAP and marked with ‘+/−’, whereas positive con-sequences are marked with ‘+’ and negative with ‘−’.

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Table 13 RAP Rural employment issue: loss or gain (+/−) (Source: Own table)

Hazard identification & estimation

(Persistence / Irreversibility / Ubiquity / Delayed effects / Harm potency - P/I/U/D/H)

Contra: Jatropha initially promoted as labour-extensive; no local job will be created (cheaper work-force will be ‘imported’) while displacing more labour-intensive jobs.

Pro: Broad scientific consent that site preparation, planting, pruning and harvesting Jatropha as biofuels are labour intensive jobs (cf. FAO 2008, 82; Kaushik et al. 2007, 303; PC 2003, 132; Shukla 2006, 253; TERI & gtz 2005, 51); especially, since harvesting can only be done manually as seeds do not mature simultaneously (Achten et al. 2008); partly also jobs in processing created (cf. Achten et al. 2008; Kaushik et al. 2007, 303).

(P/I/U/D/H) advantages materialize only if no automatization occurs & local people are em-ployed; no labour-intensive agricultural jobs are displaced.

Exposure / vulnerability assessment

74% of the population live in rural areas; large parts heavily depend on additional income or income from their land; vulnerable to job / income loss; especially women (cf. MoIB 2009, 133; TERI & gtz 2005, 51, 62, 75). Scale of positive effects varies between cultivation years and plantation models: average: 1st yr: 86-122 wd / ha*yr; 2nd yr: 20-29 wd / ha*yr; 3rd yr on-wards: 30-40 wd / ha*yr (cf. Adholeya & Dadhich 2008, 5; NABCONS 2006, 86 et sqq.). Higher estimates for the 1st yr exist (313 wd / ha*yr (cf. TERI & gtz 2005, 50); 184 wd / ha*yr 1st yr (cf. PRAYAS 2006, 31-2)).


Medium, depending on type of cultivation & inclusion of local work force & payment for seeds (cf. Altenburg et al. 2009, 83 et sqq.).

Type of uncertain-ty

Low epistemic uncertainty due to target variability.

Type of ambiguity No normative ambiguity as rural employment generation is generally welcome.

Interpretative ambiguity whether ‘sufficient’ new employment is created.

Probability of risk

Scenario agro-business

Only modest effect of rural employment in highly centralized agro-farming, but huge need in absolute terms.

Scenario niche Jobs are created but total number is limited due to a limited amount of plantation.


Focusing mainly on employment generation from the cultivation process, employment effects of processing are mostly ignored and depend on the type of processing (e.g. decentralized in local units). This can be explained by the fact that no major processing has been taking place so far and that the inclusion of unskilled labor at least in commercial projects will be difficult. However, large-scale JBD production has the potential to contribute to rural employment generation, though its scale will depend on a series of factors. More ambiguous is the case of ‘wasteland’ reclamation (seeTable 14).

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Table 14 RAP Wasteland issue: reclamation (+) (Source: Own table).


Scientific consent that Jatropha as such is a hardy plant, suitable to arid and semi-arid re-gions, and can grow on degraded soils with low fertility / moisture, including stony, gravelly or shallow, calcareous soils (cf. Dagar & Tomar 2002; FACT 2006, 3; Jongschaap et al. 2007, 6; Kaushik et al. 2007, 304; NOVOD 2007, 2, 6).

(P/I/U/D/H): Delayed effects are still unknown, high effort to plant Jatropha might make it diffi-cult to reverse; ubiquity depends on suitable wastelands chosen.


Assumed that ‘wasteland’ has no use, with planting Jatropha at least some economic use is added; Amount of ‘wasteland’ suitable for Jatropha is generally questioned (cf. ICRISAT 2007, 21; TERI & gtz 2005, 28-9): e.g., MoRD’s wasteland atlas estimates 17% or 553,000 km2 of India’s surface are wasteland (http://dolr.nic.in/fwastecatg.htm, 12.3.09). Thereof: PC 2003 report: 13.4 Mio ha (134,000 km2 / 26% of India’s ‘wasteland’) vs. Department of Land Resources of MoRD 40 Mio ha (400,000km2) vs. 72,000 km2 (cf. Altenburg et al. 2009, 25) available for Jatropha plantation on ‘wasteland’ (cf. Adholeya & Dadhich 2008, 52).


Medium, depending on type of wasteland / soil and climate.


Epistemic uncertainty: target variability: amount and suitability of was-teland disputed.

Type of ambiguity Normative & interpretative ambiguity due to dispute a) what can be considered as ‘wasteland’, b) whether it needs to be reclaimed, c) ex-tent of positive effects.

Probability of risk


Large areas are reclaimed with better QPM but mainly wasteland of better quality.

Scenario niche Relative effect on wasteland reclamation remains marginal.

Closely linked to this is the impact of Jatropha plantation on soil quality and structure, which will be discussed prior to analyzing further aspects of ‘wasteland’ disputes (Table 15).


Table 15 RAP Soil improvement (+) (Source: Own table)


Brought scientific agreement that Jatropha is rich in nutrients, especially its seed cake due to its relatively high nitrogen (also Phosphorus, Potassium) content, and has enriching effect if used as organic fertilizer instead of chemical fertilizer (cf. CBDA n.d. b; FACT 2006, 13; Kau-shik et al. 2007, 309; Lohia 2006, 259; PC 2003, 133; Shukla 2006, 253; TERI & gtz 2005, 49, 57). Plus its leaves (litter fall) provide additional nutrients and organic matter to the soil and improves soil structure (cf. FACT 2006, 11; Jongschaap et al. 2007, 5, 12; Ogunwole et al. 2008, 246-7) and its green cover retains soil moisture and prevents wind erosion (cf. Jongschaap et al. 2007, 5; Lohia 2006, 259; PC 2003, 133); plus roots system can form pro-tection against water and soil erosion, especially if inter-planted with other plants (cf. Achten et al. 2008; FACT 2006, 9; Ogunwole et al. 2008, 246).

(P/I/U/D/H): Delayed effects unclear as most studies do not build on long-term data; potency for benefit depends on agricultural practices and also on root structure, influenced by type of seed raising (Jongschaap et al. 2007, 5); ubiquity depends on plantation sizes; persistence is judged as mid-term.


Large areas of India considered as degraded areas with low soil quality, susceptible to fur-ther erosion; could be positively affected by planting Jatropha and leaving litter fall on the ground and adding seed cake instead of chemical fertilizer.

Level of com-plexity

Medium, impact of Jatropha on the soil depends on different soil treat-ments and plantation practices (cf. Jongschaap et al. 2007, 5, 11; Ogun-wole et al. 2008).

Type of uncer-tainty

Epistemic uncertainty (cf. Achten et al. 2008), studies exist, but limited to specific areas / soil types of India and plantation models (cf. TERI & gtz 2005: Hyderabad region; Ogunwole et al. 2008: Gujarat area, shallow land; Int. IARI: alkaline soils).

Aleatory uncertainty: limited information on long-term effects due to non-knowledge, e.g. potential acidification or eutrophication (cf. Achten et al. 2008; IFEU 2007, 26).

Type of ambi-guity

None, soil improvement / prevention of degradation generally judged as desirable (cf. Ogunwole et al. 2008, 245) / positive short-term effects on soils not disputed.

Probability of risk


Medium, as in large, high density plantations positive effects might be re-duced.

Scenario niche High, due to low density farm’s interest to do intercropping.

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Generally, Jatropha can be planted in many ‘wasteland’ areas. Yet this holds only true if it is not planted for commercial purposes, as input needs will be higher (cf. Jongschaap et al. 2007, 6) and most ‘wasteland’ appears to be less suitable. If planted in a sustainable man-ner, feeding back nutrients from the plant to the soil, Jatropha can have a positive impact on soil fertility allowing for intercropping. However, the use of ‘wasteland’ for this purpose is challenged by the dependency of rural people on these areas for generating income (Table 16).

Table 16 RAP Wasteland issue: land grab & marginalization of rural poor (-) (Source: Own table).


‘Wasteland’ is used by the rural poor for subsistence agriculture, wood collection and as feedstock for livestock (cf. FAO 2008, 67; Shailesh 2009, 7). Using ‘wasteland’ for Jatropha plantations changes land use, locks up the access for rural poor (especially if given to com-panies / privatization) and reduces feedstocks for livestock as Jatropha cannot be browsed by cattle (toxic) (cf. TERI & gtz 2005, 62; FACT 2006, 3).

(P/I/U/D/H): Ubiquity strongly depends on land rights and rights of local community to give access to common lands, which are the most disputed (cf. FAO 2008, 67, 85); potency for harm is high if land access is denied to a large amount of rural people and if no jobs for land-less persons will be created as compensation; more afforestation to compensate fuel wood needs (Rajagopal 2008a); persistence/irreversibility depend on success of Jatropha.


Large parts of rural population heavily depend on livestock, subsistence agriculture and wood collection from ‘wasteland’, especially women. Large parts of ‘wasteland’ designated for Ja-tropha are common property resources or consist of culturable fallow lands and degraded forests (cf. FAO 2008, 67, 85; PC 2003, 112-3; Rajagopal 2006, 3-4). If land access is denied, access to resources is lost; many rural poor do not possess any own land either or only mar-ginal patches (70% of land holdings 1 ha or less. 16% 1-2ha; cf. Altenburg et al. 2009, 91).


Medium, depending on land policies and rights.


Low epistemic uncertainty due to target variability.

Type of ambiguity High normative ambiguity as many rural people perceive a ‘land grab’, whereas governments / companies see ‘reclamation of wasteland’ & of public (!) land.

Probability of risk


Medium to high, due to large plantation needs, especially for ‘better wasteland’.

Scenario niche Low, due to low amount of wasteland and rather small plantations in decentralized value chain with participation of local communities.


The selection of ‘wastelands’, especially if common lands are included, is a highly sensitive issue, which will also directly impact on the development of the livestock sector (Table 17).

Table 17 RAP Pastoralism issue (-) (Source: Own table).


Due its toxicity, the plant is not browsed by cattle (cf. FACT 2006, 3), therefore access to land where Jatropha is densely grown is lost and availability of fodder from ‘wasteland’ is reduced; on the contrary, own field research and sporadic reports show that cattle graze weed in be-tween Jatropha plants (cf. Francis & Becker n.d, 7).

(P/I/U/D/H): Potency for harm: animals die when eating Jatropha, depending on availability of other grazing areas; long-term effects from eating weed from Jatropha plantations not known; ubiquity depends on land use type and denial of access to plantation areas – local to regional reach.


Livestock contributes with 4.7% in 2005 to Indian GDP (cf. PC 2007b). Income from livestock is of high importance for rural people, especially poor people; also demand in India for lives-tock products is increasing (cf. Ali 2007, 137; MoIB 2009, 87; Shailesh 2009, 8). Areas avail-able for livestock are mainly forests (largely owned by states, restricted access), fallow lands / wastelands, only small areas are (overgrazed) pasture lands (cf. PC 2007b; Shailesh 2009, 9).


Medium, depending on land access possibilities and amount of area being locked up.


None, toxicity for animals is well proven.

Type of ambiguity None, importance of livestock sector for India is largely unquestioned (cf. Ali 2007).

Probability of risk


High if ‘better wasteland’ is largely locked up.

Scenario niche Low – medium, only small areas covered and access not completely restricted, intercropping might conflict with pastoralism.

The effects of JBD production on the livestock sector mainly depend on how much land is really locked up and whether compensation mechanisms can be provided. Similarly – but

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being more complex –, the effect on food security mainly depends on how attractive the JBD business will be and if in the end not only ‘wasteland’ area will be used (see Table 18).

Table 18 RAP Food security issue: threat or no harm (+/−) (Source: Own table).


Pro: Jatropha is only planted on ‘wasteland’ / degraded forests not suitable for food crops (cf. Int. NOVOD; TERI & gtz 2005, 62); Jatropha improves soil quality and allows for intercropping from 2nd yr onwards with e.g. food plants; high opportunity costs to plant food (cf. Altenburg et al. 2009, 114; TERI & gtz 2005, 53; Int. NOVOD).

Contra: Pressure on economic viability of JBD will lead to encroachment of agricultural land (cf. Altenburg et al. 2009, 114; TERI & gtz 2005, 28) or higher input needs for better yield lead to competition for input resources (cf. FAO 2008, 67); ‘wasteland’ supports subsistence agri-culture by rural poor and fear that no food plants can grow with Jatropha due to its toxicity; if seed prices rise Jatropha could become more attractive than food crops (cf. Altenburg et al. 2009, 114); feared increase of livestock prices if pastures are converted (cf. Rajagopal 2008b).

(P/I/U/D/H): Potency for harm if large agricultural areas will be transferred to biofuel planta-tions and will be fed with inputs needed for agricultural crops – less own production, increase of prices, decrease of availability; ubiquity: regional to national.


More than half of India’s area is considered as arable land (cf. TERI & gtz 2005, 48) & food grain production increases (187 MT / yr 1992-97 to 227 MT / yr 2007-08), by intensifying agri-culture (area used relatively stable at 122 Mio. ha). But rapidly growing population reduces the average per capita availability of food grains (174.9 kg / yr 1992 to 152.15 kg /yr 2001) (cf. MoIB 2009, 57, 406; TERI & gtz 2005, 47) & national diets show a structural shift: more fruits, meat, eggs, thus, more need for feedstock (cf. Braun et al. 2005, 4). Effects of price changes strongly depend on households being food net-buyers or sellers, on the share of household income spent on food, and on rural employment changes (cf. Polaski 2008, 6); especially poor people & women affected if prices rise: they spend large parts of income on food & are net-consumers (cf. Cavero & Galián 2008, 1, 2) also urban workers are affected (cf. Polaski 2008, 7)


Very high, as land allotment takes place in multiple forms with varying degree of effective participation of local community representatives (cf. Altenburg et al. 2009, 113) and effects of different food prices and food supply are complex (cf. Polaski 2008) & linkages between fuel prices and food are multiple (cf. Schmidhuber 2007).



Epistemic uncertainty due to target variability and aleatory uncertainty as random events (pests / change of environmental condition) can strongly influence outcome.

Type of ambiguity Interpretative ambiguity as effects of changes in food price and supply are highly disputed for the Indian case; no normative ambiguity as food insecurity unwanted.

Probability of risk


Low − medium (pressure for productivity increase can lead to en-croachment of arable land), extent high if no large-scale employment for rural workers is generated.

Scenario niche Low impact on food security.

As long as Jatropha has to struggle for its economic viability and remains reduced to small

land patches mainly on wasteland, the likeliness of severe impacts on food security is limited.

Similarly, effects on energy security and independence, being one of the main arguments in

favor of Jatropha, would remain limited (see Table 19).

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Table 19 RAP Energy security & independence issue (+) (Source: Own table).


Lack of own sufficient energy supply leads to high dependency on imports, esp. for oil / fuels increasing production-demand-gap; demand constantly increases, e.g. due to growing auto-motive sector (cf. Int. NOVOD; Shailesh 2009, 5; Wagner 2007). Biofuels, esp. JBD, shall minimize gap by blending of up to 20% (cf. PC 2003).

(P/I/U/D/H): Persistence / irreversibility depend on economic growth / demand, national and international supply and availability of alternative fuels (1st / 2nd generation), judged as long-term; ubiquity: national; potency for harm: lack of energy could slow down economic growth and hamper also rural development.


Demand estimated for 2011 at 78.9 Mio t for petrol and diesel but national supply only at 22% (cf. PC 2003, i) but depends on further development of demand; development of alternative fuels could ease external dependency, but large-scale supply includes high land requirements for feedstock production (5% blend by 2010 = 3,3 Mio Mt JBD = 7.6 Mio ha if 2t seeds / ha*yr produced, based on TERI & gtz 2005, 41).


High, depending on multiple internal and external factors.


Epistemic & aleatory: scale of national alternative fuel supply in mid-term unknown, development of demand uncertain, effects of external shocks not foreseeable.

Type of ambiguity Interpretative, energy security and independence generally judged as important, but judgment on role of JBD between insignificant and valu-able; partly normative as alternative growth path demanded.

Probability of risk


Medium if most optimistic blending targets are met (10-12%) and yields are considerably improved.

Scenario niche Low, no significant contribution to energy security.

Closely linked to the energy security and independence is the issue of foreign exchange sav-

ings, as these are directly influenced by a changed import level of fuel/oil (Table 20).


Table 20 RAP Foreign exchange issue (+) (Source: Own table).


India’s dependence on external supply of fossil transport fuels (paid in US$) negatively affects foreign exchange balance (cf. TERI & gtz 2005, 73).

(P/I/U/D/H): Persistence/irreversibility depends on ability to lower demand or imports, but judged as long-term; ubiquity: national; delayed effects on economy; harm potential: especial-ly opportunity costs.


Annual oil import expenditure: US$ 15 bn (2003), 3% of GDP & 30% of foreign exchange earnings, tendency: increasing (cf. TERI & gtz 2005, 73). Rising oil prices can further burden foreign exchange balance. 20% substitution of fossil fuels by JBD could lead to 1.17 bn Rs foreign exchange savings by 2012 at oil price level of 2006 (cf. TERI & gtz 2005, 74).


Low, direct link between oil imports and foreign exchange balance.


Medium epistemic: future oil price and amount of biofuels uncertain.

Type of ambiguity See: energy security.

Probability of risk


Medium if most optimistic blending targets are met (10-12%) and in-ternational crude oil price is very high.

Scenario niche Low, no significant contribution to foreign exchange savings.

Both factors (energy security and foreign exchange savings) will depend to a large extent on

how successful the JBD business will turn out and on which scale it will be developed (see

Table 21).

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Table 21 RAP Non-marketability of JBD / business failure (-) (Source: Own table).


Costs and price of JBD for consumers are too high compared to fossil fuels and therefore not competitive. Fossil fuels are highly subsidized and with low oil price consumer prices remain also very low (cf. Altenburg et al. 2009, 111-2; Int. MNRE; Srivastava & Rehman 2005, 648; TERI & gtz 2005, 15-6, 42).


(P/I/U/D/H): Persistence / irreversibility: as long as low oil price and high subsidies for conven-tional fuels competitiveness gap will persist; ubiquity: local, farmers and companies in JBD business (sunk costs); delayed effects: subsidies for fossil fuels do not take into account high external costs of these fuels, can lead to more unsustainable growth; potency for harm: loss of invested money.


Costs of JBD range between 40 Rs and 80 Rs / l (cf. Altenburg et al. 2009, 37; Int. NOVOD; NABCONS 2006, 34), while in January 2009 price of fossil diesel was at 34-36 Rs at fuel sta-tions. Main cost influencing factors are cultivation costs (including costs of raw materials / inputs, labour), processing costs and productivity, recovery from by-products (cf. Adholeya & Dadhich 2008; Chandel et. al 2007; NABCONS 2006; TERI & gtz 2005).


High, as price and thereby its competitiveness are influenced by vari-ous factors.


Epistemic uncertainty due to target variability.

Type of ambiguity

Probability of risk


Low – more competitive (at ‘<35 Rs/l‘ market price scenario),88 but damage if higher.

Scenario niche Medium – JBD remains in the niche, e.g. for state transport companies / local use.

Independent from the success or failure of the JBD business, an income loss for farmers is feared (Table 22).

88 Cf. e.g. Adholeya & Dadhich 2008, 137; Chandel et al. 2007, 375; Francis et al. 2005, 20; Gonsalves 2006, 24; Kaushik et al. 2007, 308; PC 2003, ix, think that a price of 15-22 Rs / l JBD is possible.


Table 22 RAP Income loss for farmers (-) (Source: Own table).


Several hazards prevail, main hazard: high input needs for farmers to reach sufficient yields / ha, which is connected to costs, increased by low quality of planting material (low yields & oil content) as plant has not been domesticated (cf. FACT 2006, 3; FAO 2008, 69; Kaushik et al. 2007, 306; TERI & gtz 2005, 7; also Int. DBT / IARI 2 / MNRE);89 indebtedness of farmers due to their need to cover initial investment costs via loans with long pay-back periods (cf. PRAYAS 2006); pressure on purchase prices for seeds by companies; no market for seeds due to quality concerns or lack of buyers. Worsened if food crops are substituted by Jatropha farming.

(P/I/U/D/H): Persistence: mid-term with limited reversibility; ubiquity: local to regional, farmers investing in Jatropha; potency for harm: high indebtedness, this could lead to farmers’ sui-cides.


Especially small / poor farmers who needed to take up a loan will be adversely affected if they cannot recover their costs. Scientific calculations vary considerably regarding yields (0.4–12 t / ha *yr), mainly due to wrong extrapolations from single trees or unreliable data transfer be-tween different climatic regions. With additional input seed yields will be most likely between 1.5 and 5 t / ha*yr (cf. Achten et al. 2008; Jongschaap et al. 2007). Initially, input needs were underestimated (Achten et al. 2008) and farmers need to wait at least 3 years for first and up to six years for stable yields (cf. Adholeya & Dadhich 2008, 42). Therefore, repayment periods to cover initial costs vary between three (cf. Altenburg et al. 2009, 40) and five years (without loan repayment) (cf. NABCONS 2006, 88 et sqq.), including loan repayment between seven to 14 years (cf. NABCONS 2006)90 or six up to 26 years (cf. PRAYAS 2006, 16-9).91 Prices for seeds vary between 3 and 30 Rs / kg.


High due to various cost influencing factors and dependency on risk-sharing.

89 Based on the assumption that 1.500 plants / ha are cultivated (300 replaced in 2nd year), that irrigation, fertilizer and pesticides are applied and pruning is done, NOVOD estimates that the average cost / plant in the 1st year is 13.1 Rs / plant, declining to 5.1 Rs in the 2nd and 1.42 Rs from the 3rd yr onwards. Whereas NABCONS based on different plantation models (all including the need for site preparation, the buying of seedlings, FYM, replanting seedlings, pruning and irrigation), assumes that costs/ plant vary between 14.7 Rs / plant and 11.2 Rs / plant in the 1st 3.6 Rs / plant to 2.9 Rs / plant in the 2nd and 2 Rs to 1.5 Rs / plant from 3rd yr onwards (cf. NABCONS 2006, 98, 102, 106). Main differences between estimated costs result from labour costs for preparing fields, plant-ing and replanting dead plants as this is a labour intensive task and from different costs for plants & seeds. 90 NABARD argues that, depending on the plantation model, yields and wages, repayment periods for a Jatropha plantation (with costs calculated on a per ha basis) range from seven to 14 years, assuming that first yields are 0.4 t/ha in the 2nd yr, 1t/ha in the 3rd yr, 1.5t/ha in the 4th yr, and 2.25t/yr from the 5th yr onwards and that the seed price is at 5 Rs/kg with daily labour costs varying between 50 to 70 Rs/day*person (cf. NABCONS 2006). 91 PRAYAS best case scenario assumes six to seven years to recover all costs with intensive farming (2.500 plants/ha, 1t/ha yields, Rs 5/kg seeds), as soon as seed prices fall or yield decreases the year of first profit will move from 9th to 13th yr, in a worst case scenario to the 26th yr (cf. PRAYAS 2006, 19).

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Epistemic uncertainty: unreliable data for yields and optimal input needs, no long-term region-specific experience (modeling errors and target variability) (cf. Achten et al. 2008; FAO 2008, 69; Jongschaap et al. 2007).

Type of ambiguity None.

Probability of risk


Medium to high if farmers are overruled by large companies and not sufficiently integrated in supply chain & QPM provided at low costs.

Scenario niche Medium – for some farmers wrong investment, some find their place in the niche.

Moreover, effects of different business models in the life cycle emission balance of JBD need

to be taken into account (see Table 23).


Table 23 RAP Relative emission reduction vs. negative life cycle net emission (+/-) (Source: Own ta-

ble).


Pro: end-of-pipe view: JBD has lower emissions than fossil fuels due to higher flash point, especially less sulphur (cf. Lohia 2006, 259; PC 2003, viii); fuel blends aim at reducing GHG emissions. Life cycle view: wasteland plantation ensures carbon sequestration profit (cf. CBDA n.d. b; Shukla 2006, 253).

Contra: depending on business models, life-cycle emission balance can be negative if e.g. vegetation is replaced for planting Jatropha (cf. Achten et al. 2008; FAO 2008, 71; IFEU 2007, 38).

(P/I/U/D/H): Persistence of GHG emissions: long-term; irreversibility of damage: nil; ubiquity: global; delayed effects: climate change; potency for harm: negative effects on environment (droughts etc.) especially for developing countries; strong link to climate change development & rainfall in India (cf. Ramanathan & Feng 2008).


End-of-pipe-view: broad scientific consent that, if biodiesel is burned in engines, fewer hydro-carbons / less carbon dioxide are emitted. Also proven that NOx emission increase, dispute about reduction of carbon monoxide (cf. Chandel et. al 2007, 373; Mondal et al. 2008, 156; TERI & gtz 2005, 57-8).

Life-cycle-view: effects of seed-to-wheel process are taken into account; energy intensive processing and destruction of natural vegetation can lead to negative net balance (e.g. for replacement of medium dense vegetation -3.53 t CO2 equivalents/ha (cf. IFEU 2007, 38). With centralized highly energy efficient processing and replacing of fossil energy with by-products positive net-balance for GHG & energy calculated (cf. IFEU 2007, 24).

Targets: environment and humanity.


High if life-cycle is assessed as various factors (change of land use, plantation practices, energy intensity, processing, use of by-products, lower energy content) influence outcome to varying degrees (cf. Ach-ten et al. 2008; FAO 2008, 8, 18; IFEU 2007; TERI & gtz 2005). Car-bon sequestration potential varies depending on additional inputs and agricultural practice (cf. Ogunwole et al. 2008, 249-250).


Epistemic uncertainty: many tests limited to end-of-pipe view or to bio-diesel in general (e.g. USEPA data, cf. Francis & Becker n.d., 8), only few Indian-JBD specific tests (e.g. Daimler/CSMCRI, IFEU 2007; Ach-ten et al. 2008; TERI & gtz 2005, 55-6 on the lack of Indian specific data); lack of broad harmonized life-cycle data (cf. Achten et al. 2008; Becker & Makkar 2008, 107; FAO 2008, 8).

Tests on carbon sequestration potential limited to extrapolations and small area tests (cf. Ogunwole et al. 2008, 249 et sqq.; also IFEU 2007, 49).

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Type of ambiguity Interpretative ambiguity especially about NOx emissions: positive ef-fect if not higher than fossil fuel and also manageable (cf. Chandel et. al 2007, 373; Mondal et al. 2008, 156; PC 2003, viii) vs. high green-house potential of NOx emissions or increase compared to fossil fuel (cf. IFEU 2007); normative ambiguity: “increase in energy GHG sav-ings leads to less favorable results for acidification, eutrophication, nitrous oxide” (IFEU 2007, 28, 49).

Probability of risk


Low emission level if restricted to ‘wasteland’ with no vegetation and highly energy efficient processing using by-products and few trans-ports (cf. IFEU 2007).

Scenario niche Low to medium emission level if restricted to ‘wasteland’ with no vege-tation, less energy efficient processing (cf. IFEU 2007), but lower than fossil fuel.

Concluding, the use of JBD renders a considerable reduction in net emissions possible if the impacts of all life-cycle steps on the emission balance are optimized. Closely linked to this are two issues: particulate matter and income generation from CDM projects.

Table 24 RAP CDM income generation issue (+) (Source: Own table).


Biofuels can benefit from CDM via their additional emission reduction if treated as afforesta-tion projects (if Jatropha is recognized as tree), or as emission-efficient application as a fuel and thirdly, the entire value chain (cf. Altenburg et al. 2009, 35; Chandel et. al 2007, 368; Shailesh 2009, 6-7; Shukla 2006, 253; TERI & gtz 2005, 55) if emissions are proven to be reduced and Certified Emission Reductions (CER) are earned.

(P/I/U/D/H): Persistence: only if net-emission reduction is proven and blending not mandatory; ubiquity: local.


Beneficiaries: limited groups of farmer initiatives, especially companies (e.g. for road trans-port) can earn additional income (cf. FAO 2008, 59; TERI & gtz 2005, 55), indirect beneficia-ries if market for JBD is enforced, e.g. farmers (cf. Altenburg et al. 2009, 100; TERI & gtz 2005, 82).


High, see life cycle emission, difficult to prove emission balance for entire life cycle (Altenburg et al. 2009, 35).


Epistemic, only few experiences to handle demanding CDM certifica-tion process (cf. Altenburg et al. 2009, 3; TERI & gtz 2005, 55).


Type of ambiguity

Normative ambiguity whether CDM via biofuels is suitable way (cf. SWPD 2008, 9; TERI & gtz 2005, 82).

Probability of risk


Medium, large companies can easier afford / manage CDM certifica-tion process.

Scenario niche Restricted if no external help for smaller projects to manage CDM process.

Hence, it is rather doubtful whether income generation from CDM will develop a critical scale.

It might remain limited to supporting bigger projects run by companies or NGOs. Contrary,

the issue of particulate matter is less dependent on a scenario (see Table 25).

Table 25 RAP Particulate matter issue (+) (Source: Own table).


End-of-pipe view: while burnt in engines “solid carbon fraction of particulate matter (as the oxygen in the fuel enables more complete combustion into CO2 and eliminates sulphur dio-xide as there is no sulphur in biodiesel).” (TERI & gtz 2005, 57; cf. PC 2003, viii, assuming 25-50% reduction from pure JBD; also Kumar 2008, 38).

(P/I/U/D/H): persistence: short-term; reversible; ubiquity: local; delayed effects on health & climate change (cf. Ramanathan & Feng 2008); potency for benefit: improvement of air quali-ty.


Target: air quality / health situation can be improved if less particulate matter emitted by en-gines, especially population in big cities with high vehicle/car density (Delhi, Mumbai etc.) can profit, as cars contribute largely to air pollution (64% in Delhi; 52% in Mumbai) (cf. Chandel et. al 2007, 373; Francis et al. 2005, 15; PC 2002, 74; Ramesh et al. 2007, 1; Ravindranath et al. 2000, 102; WHO 2008).


Low.

Type of Uncertain-ty

Low epistemic uncertainty as only the amount of (relative) reduction varies.

Type of ambiguity --

Probability of risk


High, but high growth of vehicle sector and limited blend could com-pensate positive effects (low extent of consequences).

Scenario niche Low, no significant impact.

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Speaking about the reduction of particulate matter from Jatropha SVO or JBD, some also refer to it in comparison to the use of traditional biomass in household stoves and other local applications (cf. PC 2007a, 385), as ¾ of Indian households still use wood or dung as fuel sources (cf. Shailesh 2009, 7) causing devastating impacts on health (cf. Srivastava & Reh-man 2005, 646).

There is a series of further environmental issues linked to the plans of large-scale JBD pro-

duction, like the issue of its effects on bio diversity (see Table 26).

Table 26 RAP Biodiversity loss issue (-) (Source: Own table).


Large-scale monocropping plantations with high density and selected Jatropha accessions reduces biodiversity in the area under plantation (cf. Achten et al. 2008; Altenburg et al. 2009, 114; PCB 2008).

(P/I/U/D/H): Persistence: mid-term to long-term, partly reversible, ubiquity: local; delayed ef-fects unknown; potency for harm: loss of habitat.


Target: natural habitat in terms of plants and animals is lost due to land conversion into bio-fuel plantations


Medium, depends on total amount of area covered in one patch, on density and type of plantation (mono-/inter-cropping) (cf. Achten et al. 2008).


High epistemic uncertainty: long-term effects of plantations are com-pletely unknown (cf. Achten et al. 2008; FAO 2008, 66; Negi et al. 2006, 12; TERI & gtz 2005, 60).

Type of ambiguity

Interpretative ambiguity: due to the remaining genetic variety the ad-verse affects are questioned (cf. FAO 2008, 66) and current observa-tions largely differ, e.g. on the frequenting of the plantations by birds (cf. Francis et al. 2005, 21, vs. Int. IARI2).

Normative ambiguity as the total area potentially covered by Jatropha plantation is regarded as relatively small and ‘substitution of wastel-and’ regarded as tolerable (not for the case of forests) or seen as res-toration of biodiversity (cf. Achten et al. 2008; TERI & gtz 2005, 60).

Probability of risk


High probability (plantation model in scenario), local extent.

Scenario niche Low.

Concerns about a biodiversity loss if large-scale mono-block plantations materialize are still not substantiated by scientific data due to the lack of long-term experience with large-scale


plantations of Jatropha. However, it is connected to fears that Jatropha, as a toxic plant, could have a long-term allelopathic effect on soils and become an invasive species (Table 27)

Table 27 RAP Allelopathic effect / suppression of local vegetation (-) (Source: Own table).


Two hazards: As Jatropha is very hardy it could become invasive (especially if grown in larger patches) and replace natural vegetation (evidence from other countries, cf. Achten et al. 2008; and from specific areas, cf. Int. IARI 2). Secondly, its toxins (e.g. from leaves) can have an allelopathic effect on soils and the microbiological structure of the soil might be replaced by the toxins of Jatropha (cf. Int. IARI 2).

(P/I/U/D/H): Persistence: mid-term, partly reversible; ubiquity: local; delayed effects unknown; potency for harm: loss of natural local vegetation; dose-response relationship unclear.


Target: natural vegetation surrounding or within Jatropha plantations; suppressed or affected by toxins from Jatropha.


High, depends on several factors like stability and accumulative effects of toxins in soils (e.g. Jongschaap et al. (cf. 2007, 12) argue that toxic components quickly decompose).


High epistemic uncertainty as long-term effects of Jatropha plantations (also on intercrops) are unknown (cf. Achten et al. 2008; Int. IARI 2), its capability for self-propagation (cf. FACT 2006, 6; Int. IARI 2) and its capability for accumulating toxins in soils and suppressing vegetation are often disputed (cf. Francis et al. 2005, 21).

Type of ambiguity Normative ambiguity as some features of Jatropha’s toxicity are also seen as preferable in their use as bio-pesticides / insecticides (cf. Francis et al. 2005, 18; Kaushik et al 2007, 310).

Probability of risk


Medium to high due to high-density of plantation; local extent.

Scenario niche Low.

Furthermore, with a view on large-scale block plantations also their susceptibility to pests

and diseases is questioned (see Table 28).

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Table 28 RAP Diseases & pests: controllable or pest bank (+/-) (Source: Own table).


Several diseases and pests affect Jatropha plantation. Jatropha itself hosts a range of viruses (cf. Achten et al. 2008; FACT 2006, 11; Jongschaap et al. 2007, 23; NOVOD 2007, 6).

(P/I/U/D/H): Persistence: depends on effective countermeasures (pesticides); irreversibility: no; ubiquity: local to regional depending on scope of pest / disease; delayed effects: un-known; potency for harm: destruction of Jatropha and other crop plantations and harvests, loss of income for farmers.


Target: Jatropha plantation itself but also neighboring plantations, e.g. cassava fields as Ja-tropha is host to a cassava-affecting virus (cf. FACT 2006, 11). Especially if planted as mono-culture and irrigated as well as fertilized, susceptibility to diseases and pests enhances (cf. Achten et al. 2008; Jongschaap et al. 2007, 23).


Medium to high as not all ways of transmission / abatement proved.


Though a range of diseases and pests have been already proven, ep-istemic uncertainty remains as not all crop-affecting viruses hosted by Jatropha are known (cf. FACT 2006, 11), uncertainty about severity of disease- and pest-susceptibility (cf. FACT 2006, 17; TERI & gtz 2005, 59); uncertainty also due to modeling errors (transfer of knowledge from single trees to plantations) (cf. Jongschaap et al. 2007, 23).

Type of ambiguity Normative ambiguity partly, as some judge diseases and pests as ma-nageable.

Probability of risk


Medium or low if QPM with less susceptibility to diseases / pests and necessary knowledge about them available (assumed in scenario).

Scenario niche Low to medium, low density & intercropping, small plantations.

The possibility that Jatropha becomes affected by a series of diseases and pests if grown on

large-scale needs to be taken into account. However, there are also further positive issues

associated with Jatropha planting (see Table 29).


Table 29 RAP Afforestation (+) (Source: Own table).


Jatropha can be planted in under-stocked forests, increasing tree density (cf. PC 2003, 132).

(P/I/U/D/H): Persistence: depends on stability of Jatropha trees; irreversibility: low; ubiquity: local; delayed effects: unknown; potency for harm: social tensions similar to ‘wasteland’ (cf. Balooni & Singh 2007).


India possesses high areas of (under stocked) forests (22% of area) mostly owned by state, 50% with less than 40% tree cover (cf. Altenburg et al. 2009, 46, 48; Ravindranath et al. 2000, 102), 4% / 126,500 km2 of the entire land area judged as underutilized/degraded noti-fied forest land (cf. http://dolr.nic.in/fwastecatg.htm, 12.3.09).


Medium, depends on light needs and root system of Jatropha (cf. Ach-ten et al. 2008; FACT 2006, 20; , Jongschaap et al. 2007, 5).


Epistemic about suitability of Jatropha for afforestation (cf. pro: PC 2003. 132, contra: Altenburg et al. 2009, 117; FACT 2006, 20; see also: Balooni & Singh 2007).

Type of ambiguity --

Probability of risk


Low probability & extent due to value chain model.

Scenario niche Medium, integration into JFM approaches but limited impact.

Although Jatropha is propagated for afforestation (see Annex 5), little academic research

seems to exist on this issue, like for the next, complex issue: water consumption (Table 30).

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Table 30 RAP Water: conservation or overexploitation (+/-) (Source: Own table)


Pro: Jatropha needs less water as a perennial plant to grow (mainly 1st yr only) and even does not support water ponding (cf. FACT 2006, 15; Gonsalvez 2006, 5; NABCONS 2006, 48). Jatropha could also prevent water erosion (see soil erosion) and needs less water than other biofuel crops, e.g. sugar cane (cf. TERI & gtz 2005).

Contra: Plant needs water for good yields (at least 1/month, 1st-3rd yr, esp. summer) (cf. FAO 2008, 64; Kaushik et al. 2007, 306; TERI & gtz 2005, 61), water could be deviated from other crops; fertilizer contaminates water.

(P/I/U/D/H): persistence: mid- to long-term; ubiquity: local to regional; reversibility: slow; de-layed effect: eutrophication / degradation of soils; potency for harm: lack of water for food crops.


Target: fresh water; large parts of India are under water-stress, which is likely to increase, though irrigation potential of 140 Mio. ha only exploited to 70% (cf. Braun et al. 2005, 4; TERI & gtz 2005, 61), almost 40% of Jatropha plantations currently use manual or drip irrigation (GEXSI 2008, 129); amount of water needed/ha unknown, few estimates for water use in processing (e.g. Francis et al. (cf. 2005, 20) 80l/t JBD; Rajagopal 2008b).


High as water needs and impacts depend on soil type, local climatic conditions, ability to prevent water evaporation and root system (cf. Achten et al. 2008; Jongschaap et al. 2007, 6; Kaushik et al. 2007, 306).


Epistemic, as water needs and rational water input ratios are unknown (cf. Jongschaap et al. 2007, 6). Many studies ignore water needs from further processing (cf. ibid., 6) and impacts on water quality from processing (cf. TERI & gtz 2005, 61).

Type of ambiguity Interpretative whether low water needs are adverse or not and if con-tribution to watershed management.

Probability of risk


Medium to high if water is preferably given to Jatropha plantations and large amounts are consumed; also high density can have direct or indirect effects (higher need for fertilizer, cf. Jongschaap et al. 2007, 11).

Scenario niche Low to medium if limited to small plantations and efficient water man-agement practices are in place, plantation can contribute to watershed management.

The question of water demonstrates that available data is mostly focusing on the cultivation stage, while the amount of water demand covering Jatropha’s entire life cycle still needs to be assessed and also compared with other biofuels. Regarding ‘fuel safety’, one could argue


that this does not strictly fall under the category of systemic risks. Despite that, it has been included here as in case of a large-scale production it could reveal some transboundary ef-fects.

Table 31 RAP Fuel safety (+) (Source: Own table).


Diesel blends with JBD increase flash point of fuel, thereby fuel safety is increased (no risk for vapor explosion from JBD) (cf. Achten et al. 2008; PC 2003, 59-60); JBD is considered to be less toxic than conventional fuels, but still needing safety mechanisms (cf. PC 2003, 59; TERI & gtz 2005, 59); it contains less polycyclic aromatic compounds, therefore less negative ef-fects on human health than conventional diesel (cf. Mondal et al. 2008, 156; PC 2003, 60), JBD judged as biodegradable (cf. TERI & gtz 2005, 59).

(P/I/U/D/H): persistence: depends on blending, storage; irreversibility: low; ubiquity: local; delayed effects: JBD can harm animals (cf. TERI & gtz 2005, 59), cause cancer (SVO) or skin irritation.


India uses generally fuels with very low flash points (cf. PC 2003, viii) and conventional fuel is still used in large proportion; target: people in contact with fuels (e.g. workers). Blends could reduce risks although not fully replace health affecting fumes (cf. PC 2003, 60).


Medium.


Low − medium epistemic uncertainty: as several studies on the physi-cal properties of JBD exist, e.g. several studies have proven high flash point (172° C or higher) (cf. Becker & Makker 2008, 107; Francis & Becker n.d., 7), but some data seem to refer to US studies or to bio-diesel generally (cf. e.g. Mondal et al. 2008, 156; PC 2003, 61; TERI & gtz 2005, 59), risk of modeling errors; long-term effects of Jatropha SVO causing cancer questioned (cf. Achten et al. 2008; contrary: FACT 2006, 8).

Type of ambiguity Normative: although known that JBD is harmful to some animal larvae partly seen as tolerable because less toxic than fossil diesel (cf. e.g. PC 2003, 60-1).

Probability of risk


No impact on probability, but on extent of consequences (medium).

Scenario niche No impact.

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While JBD is generally seen as a safe product, its feedstock (plants and seeds) show some harmful properties, which have been subject to heavy criticism, especially in cases where children were affected and animals died after consuming parts of the plant (see Table 32).

Table 32 RAP Intoxication (-) (Source: Own table).


1) Toxicity of seeds, plant and seed cake due to toxic proteins (curcin, diterpine etc.) (cf. Ach-ten et al. 2008; FACT 2006, 3, 8). 2) Processing of JBD involves highly toxic methanol (cf. FACT 2006, 38; Kaushik et al. 207, 307) and other toxic chemicals if oil extraction is done using solvents (cf. Achten et al. 2008).

(P/I/U/D/H): Persistence: depends on dose & target; irreversibility: partly yes; ubiquity: local; Delayed effects: health risks; potency for harm: illness / death.


Targets: animals (esp. goats, cf. Makkar & Becker 1998), humans, particularly children after eating Jatropha (especially seeds), due to ignorance of toxicity and workers in processing units. Impacts from eating Jatropha vary depending on dose from diarrhoea to death (ani-mals) and pre-treatment-dependency – lethal dose for animals documented (cf. Makkar & Becker 1998; TERI & gtz 2005, 59-60).


Low.

Type of Uncertain-ty

Toxicity of Jatropha is well documented (cf. e.g. Aderibigbe et al. 1997; FACT 2006; Makkar et al. 1997; Martínez-Herrera et al. 2006; TERI & gtz 2005, 59) same for methanol; also impacts on humans and ani-mals (cf. Kaushik et al. 2007, 309).

Type of ambiguity Normative: toxicity partly seen as desirable to use Jatropha as hedge / prevent grazing by cattle (cf. FACT 2006, 3) and also medicinal appli-cations (cf. Kaushik et al. 2007, 309), although toxicity seen as serious risk for human health (cf. Achten et al. 2008; TERI & gtz 2005, 62).

Probability of risk


Only impact if research enables less toxic varieties of JBD (assumed in scenario 1) and methanol is replaced by less toxic alcohols and no solvent extraction used.

Scenario niche

Apart from the risk issues assessed above, further topics require attention as they have been identified in the pre-assessment stage. The discussion about ensured economic growth and


the sustainability of India’s growth path are deemed as being two overarching issues, which integrate many of the before mentioned risks. Generally, the contribution of the JBD business to economic growth can happen in two ways: directly by creating new jobs (e.g. rural em-ployment) and increasing investment in the agricultural sector, or indirectly by providing an additional energy source, especially to the transport sector. Whether this growth will be sus-tainable is a highly normative question and depends also upon factors outside the JBD busi-ness like an increased search for more energy efficiency and, especially looking at the trans-port sector, increased supply of public and goods transport solutions. But the rural sector can also benefit from the JBD business. Directly, Jatropha could be beneficial if its positive cha-racteristics materialize, e.g. its potential to reduce GHG emissions and particulate matter.

Moreover, the issue of ‘abandoning 1st generation biofuels’ identified as a risk will be (in or-der to avoid redundancy) treated in chapter 4.3.2 as in this chapter the question of possible substitutes for 1st generation JBD is dealt with.

4.2.2 Concern assessment

Apart from the previous, more evidence-oriented characterisation, the task of concern as-sessment, including an analysis of public risk and benefit perception, is to provide insights in HOW risks are perceived, based on the assumption that the response to risks in public might vary from that of risk assessors or managers. It can also have a major influence on the eval-uation of a risk as tolerable or acceptable and can lead to social mobilization.

Obviously, the ‘public’ is a very broad concept and public perception might vary between different regions (e.g. urban / rural areas or states) in a country as large as India. Further-more, public opinion is a moving target as, with the broad diffusion of new expertise on con-sequences of biomass cultivation and bioenergy, public opinion patterns tend to change over time. While looking at concern assessment and, later on, at risk evaluation (see chapter 4.3.2) one can distinguish between the several stakeholder groups identified in chapter 4.1.1. In order to operationalize the assessment of public opinion, NGOs’ and media reports will be treated as indicators apart from secondary literature and information gained in the interviews. Thus, the following picture presents a snap shot derived from these sources. Within public opinion, concerns of farmers will play a central direct and indirect role as some NGOs claim to represent farmers’ concerns. This focus is justified by the share of farmers in India’s popu-lation (60%), their influence on local and national politics (cf. Yamaguchi 2005, 93) as well as their central role in the JBD value chain. Chapter 3.1 already showed that these stakeholder groups partly diverge in their way of framing the issue. Furthermore, they also differ regard-ing association with semantic risk patterns. As the interviews have shown, most government, research and business representatives treat risks associated to large-scale JBD production as a question of own strengths in terms of stricter monitoring systems (cf. Int. MB / Medors), intensified research, better regulations and policies or management practices. The following quotes highlight this perception:

“These are all manageable problems, which will be solved, and that is a normal process that there are obstacles, once you start something new and one had to start at some point. But with the amount of R&D the GoI is doing, these problems will not persist” (Int. DBT).

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“Presently the yield levels of the crop are low may be due to poor management in respect of spacing, nutrition, irrigation and pruning levels associated with unadapted provenances. Standardization of the nursery and silvicultural techniques and selection of high-yielding provenances can solve the problem” (Kaushik et al. 2007, 311).

Contrary, most NGO representatives in the interviews felt that many of the risks are some kind of “looming danger” (in style of ‘insidious danger’; Shiva 2008, 35) especially to farmers and poor people. But they also clearly identify who to blame:

− the industry, for its enormous bargaining power compared to the individual farmers and influence on state policies (cf. Bhutani & Kohli 2008b; Int. CECOEDECON / GRAIN / KEAG; Shiva 2008),

− the government for its lack of clear and protective regulations and policies as well as for its ‘pushiness’ to allot land for Jatropha plantations (cf. Int. CECOEDECON / PRAYAS / SPWD; Shiva 2008) and to create an “artificial demand” for JBD (Int. GRAIN) as well as

− those people leading an energy-intensive life-style, who can, because of their consump-tive strengths, divert energy resources for their own use (cf. Int. GRAIN / KEAG / SPWD).

Regarding concern assessment indicators (see Table 4), the following trends became ob-vious:

Perception of familiarity & knowledge about the hazard: The plant as such is not a new plant to India, as it has already been growing in wild for considerable time (cf. PRAYAS 2008; Int. Utthan; see chapter 3). Some of its scale-independent hazards are generally known since parts of the plant have already been in use as soap basis or medicinal applica-tion. Yet the knowledge e.g. about its toxic effects on humans and animals does not seem to be very common in all regions, as some news reports showed.92 Additionally, many hazards and risks deriving from its intensive plantation as a biofuel crop that do not refer to general agricultural hazards (like monocultures, intensive water / fertilizer use) are not investigated yet. With India being one of the early-adopters of large-scale JBD (cf. GEXSI 2008), few models for comparison have been available at that time. Even more, as Jatropha is treated as a distinct biofuel crop due to its non-edibility and as it is thought to be grown only on ‘was-teland’. Few are aware of the previous failure of large-scale Jatropha production in Nicara-gua (cf. Int. MGIAS; Negi et al. 2006, 29).

After its introduction as a biofuel crop, some start linking its hazards and risks with better-known cases, e.g. the land grab that is taking place in Madagascar by foreign companies:

“In many other countries, companies can acquire now more and more land very easily, even if this tendency is not that strong in India like in other countries like Madagascar, where half of the land has been sold, there is also a tendency that even foreign compa-nies can get easier access to land” (Int. GRAIN).

As a second example, some fear that Jatropha contract farming could cause a strong de-pendency of farmers on companies, so that they would lose their means of existence once it turns out that Jatropha is not competitive if grown in India or if companies dump prices. 92 Interestingly, there have been some reports in news agencies about intoxications, but not in the newspapers analyzed. See for example Acharya 2009; UNI 2008b-e.


“Earlier attempts of linking the target population with the industry and making them self re-liant, operating in the free market have not worked. [..] Plight of Eucalyptus planters in many parts of the country where the trees were planted by the farmers on their agricultural land on a buy back guarantee from the paper companies is not a distant past when at the time of harvest the companies imported pulp from Indonesia citing higher cost of purchas-ing the timber from the farmers as compared to importing pulp” (Negi et. al. 2006, 12-3; cf. also Int. CSE; Rajagopal 2006, 6).93

In this case, non-familiarity with the risk-agent and some of the risks and hazards leads to an anchoring effect, comparing them to known events, like it is done for the case of impacts on food security equating Jatropha with other biofuel feedstocks in third countries (cf. e.g. Raja-gopal 2008b; Shiva 2008).

Inequity / injustice associated with risk & benefit distribution: many NGOs criticize the whole Jatropha business for needing to be more community-based in order to prevent far-mers, who have financially committed themselves to Jatropha, from carrying the risks and “big companies” from making the profit exclusively (Int. CSE / PRAYAS / SPWD). Further-more, they argue that it will not be the farmers who profit from an increased biofuel supply (cf. Int. CECOEDECON / GRAIN / KEAG / PRAYAS / SPWD). Some even fear that in the long-run it will not even be the Indian economy profiting from an increased biofuel supply, but European or US-markets (cf. Int. SPWD). However, it is unknown how strongly this percep-tion dominates public opinion.

Perception of fear / dread due to risk: These perceptions largely refer to the farmers, since most negative consequences have a direct impact on their livelihoods, while the most posi-tive consequences are perceived to rather benefit the society as such (energy security, less GHG emissions / air pollution etc.). Only if further-reaching negative consequences of a large-scale JBD production affect a broader public (e.g. a dramatic increase in food prices which would affect urban households to a higher degree (cf. Schmidhuber 2008, 28) or direct health impacts), they might at all become aware of these risks (cf. Hopkinson 2001, 9, 11).

Perception and trust in personal / institutional control over risk management: The de-gree of trust in institutions being central for mitigating risks of large-scale JBD production varies among the members of the NGO sector. While some show a certain degree of trust,94 others fear that even if right laws are in place, the effective implementation of protective rules and policies can be doubted due to different reasons like corruption or corporate influence (cf. Hopkinson 2001, 16-7; Int. CECEOEDECON / CSE / GRAIN / KEAG / SPWD). More doubtful voices assume that regarding the risk management qualities of government institu-tions there is “apathy from the government towards the farmers to protect their interests” (Negi et al. 2006, 13) or that, regarding Jatropha, governments are rather still in an experi-menting stage instead of providing security (cf. PRAYAS 2006, 42). Furthermore, some of the interviewees raised concerns about the necessary qualifications of companies to grow Jatropha under local conditions in India as they would still lack the necessary (long-term) 93 On the other hand, TERI, one of the major research institutes in the JBD field, also highlights many positive cases, in which contract farming has worked out (cf. TERI & gtz 2005, 66-8). 94 See for example “Companies want to acquire and to have control over large areas of land, but this will not be spelled out in the policy.” (Int. CSE) or “The Government of India has good intentions, like using only wasteland not food land” (Int. SPWD).

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experience and knowledge (cf. Int. CECOEDECON / PRAYAS). At least, within their regional scope a number of NGOs see some potential asserting their influence on the development of the Jatropha business and therefore mitigating risks (cf. Int. CECOEDECON / PRAYAS).

Potential for social mobilization: As regards the current national election for Parliament, the interviewees did not give any evidence that biodiesel would play a major role as an elec-tion campaign topic. However, one of the interviews revealed that the JBD issue did play a role in the 2008 state elections in Rajasthan (cf. Int. CECOEDECON). Furthermore, the same state had to scale down previous plans to allocate more ‘wasteland’ for Jatropha culti-vation, especially looking at common lands, due to public pressure (cf. Negi et al. 2006, 7; also: Int. MGIAS). In previous national elections questions of rural development − even though not directly related to the biodiesel topic − have not only played an important role but even led to the electoral success of the Congress Party. In the forerun of this year’s election the issue of heavily indebted farmers (and cases of (mainly BT cotton) farmers’ suicides due to excessive indebtedness) put lots of pressure on the government, so that it decided in an ad-hoc approach to implement a debt-waiver for marginal and small farmers (cf. Gupta 2008, 1, 13; Imhasly 2008, 17; MoIB 2009, 58; Yamaguchi 2005, 93). Specifically regarding JBD, some reports exist on cases where above all the large-scale privatization of common lands (‘land grabs’) has led to local tensions, and there is an increased conflict potential perceived due to land grabs for Jatropha (cf. Int. CSE / KEAG; Shiva 2008, 11-2, 38; WBGU 2008, 134).95 Moreover, the example of land grabs seems to demonstrate an availability bias within risk perception. So far, the number of documented cases of land grabs is limited to certain areas and villages, especially, since the business is developing slower than previously thought. These cases (above all in Rajasthan and Chhattisgarh; cf. Shiva 2008) are often cited in the interviews; therefore, the issue at the current level might be overestimated in its scope. However, the risk that more cases will materialize in the future cannot be dismissed.

Benefit evaluation (society / individual): There are cases cited in which farmers (e.g. in a feedback session with ICRISAT) showed some willingness to assume a certain risk level if they were guaranteed a minimum price by the purchasing companies / state organizations (cf. TERI & gtz 2005, 53). Yet the price demanded is in some cases higher than most calcu-lations for economically competitive JBD prices would permit. This is consistent with evi-dence found from other examples of introducing agricultural goods like genetically modified crops. In this case it was found that expected economic benefits due to high yields and less-er input needs would outweigh or at least dominate other (like environmental) objections (cf. Chong 2005, 625-8; Yamaguchi 2005, 92-3), except for concerns about human and animal health issues (cf. Chong 2005, 625-8). The latter might be explained by an analysis stem-ming from a survey of environmental attitudes in developing countries including India con-cluding that

“environmental degradation is increasingly seen, especially in poor nations, not as a post materialist quality-of-life issue but as a basic threat to human survival [...]. In other words, environmental quality seems to be moving from a ‘higher order’ value to a ‘lower order’ need in Maslowian terms“ (Dunlap & Mertig 1995, 135).

95 This is supported by an event in 2007, in which over 25,000 farmers and tribals protested in a rally towards Delhi for better land rights and an examination of the land reforms (cf. Brunei Times 2007; Imhasly 2008, 17).


Some farmers even see a beneficial effect of what others would judge as risks:

“Some farmers argue that biofuels are a good thing and growing Jatropha is beneficial be-cause the prices for food are going up and the farming sector can benefit from this price increase” (Int. PRAYAS).

Looking at opinions presented by media sources, first of all overall societal gains like energy security and economic growth (chapter 4.1.1.6) are stressed. With regard to the potential consumers of biodiesel little evidence is known on their risk perception for this specific case. Evidence from other cases, which might serve as a guideline, is highly ambivalent in its re-sults. While one study on genetically modified food in India concludes that

“important benefits offered by transgenic products can outweigh the risks associated with those products [and that] [...] perceived benefits have a greater statistical influence on consumer acceptance than do perceived risks“ (Chong 2005, 629),

another study on especially low-income consumers of developing countries, including India, comes to the conclusion that

“[r]esidents of low-income nations are slightly more likely to rate environment as a serious problem, but significantly less likely to rate it as serious relative to other national problems [...] however, tend to see the environment as a relatively serious problem“ (Dunlap & Mer-tig 1995, 129, 135).

Especially in India, pluralities in the study ranked environmental concerns (especially air and water quality) higher than economic growth and showed willingness to pay higher prices for environmentally friendly goods (cf. Dunlap 1994, 117-9; Dunlap & Mertig 1995, 133-5).

Concern assessment also includes analyzing the role of media and pressure groups, their potential influence on public opinion via their key messages, the scope of media coverage and the organizational level of pressure groups and their ability to foster social mobilization. On the first two points information has been provided in chapter 4.1.1.6. As described before, press coverage at the national level has been fairly widespread in the media analyzed. Fur-thermore, the picture in the media has been largely positive, demonstrating trust in compa-nies and government action. Therefore, no major mobilization against large-scale JBD pro-duction is expected from the media within short-term. In the long-run, especially issues such as the international ‘food vs. fuel’ debate could gain more importance in media coverage fuel-ing concerns of the broader public (cf. Shailesh 2009, 26).

Looking at the NGO sector, there seems to be potential for mobilization. First of all, many NGOs have access to large networks of farmers and SHGs, mobilizing them already in favor of planting Jatropha96 and also against large-scale Jatropha farming (cf. Int. PRAYAS) like CECOEDECON. CECOEDECON helps farmers to organize themselves; it has developed an organizational structure for this purpose from village to district level, which is still in an evolv-ing state in three districts in Rajasthan. Furthermore, CECOEDECON tries to reach farmers

96 Like Humana, who in an interview explained that the NGO has created farmers clubs for Jatropha plantations. Actually 86 clubs are running including 1,125 farmers and all of them are planting Jatropha. Furthermore the NGO runs 157 SHGs for women, elderly people and other social groups, via its women SHG they reach 2,000 women in rural areas. A second example is Utthan, argueing to have expanded Jatropha plantations already to some 36,480 ha due to their trustful cooperation with 96 villages (cf. Int. Utthan).

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and the public via broadcasts or like GRAIN and KEAG via articles to inform them about the (negative) consequences of growing Jatropha on a larger scale (cf. Int. CECOEDECON / GRAIN / KEAG).

Secondly, many NGOs are cross-linked not only amongst each other, like the recent cooper-ation in form of public letters to the Indian government speaking out against JBD (cf. PCB 2008) and the jointly organized national civil society consultation on biofuels (cf. DDS 2007) demonstrated. They are also incorporated in an international network and Indian NGOs are amongst the strongest and best-established civil society organizations on the Asian continent (cf. Hopkinson 2001, 8-9, 11, 15; Stuligross 1999, 399). CECOEDECON and GRAIN for ex-ample are connected to Misereor (cf. DDS 2007; Int. CECOEDECON). Moreover, Vandana Shiva, founder of NAVDANYA and one of the most prominent critics of biofuels in India who received the alternative Nobel Prize in 1993, is often heard on the international scene. NAV-DANYA too is well linked with European NGOs, which spread information provided by NAV-DANYA.97 Some of the most active NGOs activists against JBD are part of international NGO network (e.g. GRAIN). Therefore, risk managers should take into account that pressure against biodiesel in India could emerge within but also outside the country.


Summarizing the findings of this chapter, two issues need special attention: firstly, the results of risk assessment and secondly, main features of concern assessment. Regarding the first aspect, it is obvious that corporate risk managers have to act within an environment of limited certainty, even though risk assessment and current research might create the impression that much information is already available. Yet this can only rely on the currently available knowledge. New insights might bring up new risks or let other risks appear less important. Furthermore, spill-over effects and mutually-reinforcing effects between risks have to be tak-en into account. However, long-term effects are still unknown as the business is rather new to India and, therefore, unexpected new spill-overs can occur.

Secondly, looking at concern assessment, several indications have been found that risks and hazards are perceived worse in an anticipation of future developments than the current nas-cent status of the business would require. This is caused by several factors: the familiarity with some of the hazards is low; risks related to JBD are compared and associated with other events occurring in other countries or other types of agro-crops and biofuels; the trust in risk management capacities considerably varies, being lower for corporate risk management. Last but not least, injustices concerning small farmers are perceived. Consequently, several issues, especially farmers’ welfare and ‘land grab’, show some potential for political mobiliza-tion, whereas the mobilization potential for a broader public due to environmental concerns will restrain to environmental risks that directly and visibly affect everyone’s life quality. In this sense, it will be critical to see how much the JBD business will be able to contribute to an observable level to increase social development, in particular rural income generation that might compensate for other losses and also positively influence public opinion. 97 For example NAVDANYA’s report on biofuels in India has attracted major attention not only within India as interviews demonstrated but is also spread by European NGOs, see e.g. Regenwald e.V. on their website: http://www.regenwald.org/international/englisch/links.php?rub=1 [15.4.09]. The National Consultation (DDS 2007) too produced much interest on the international civil society scene against biofuels, see e.g. reports about it on http://www.biofuelwatch.org.uk/docs/mausam_colonizingthecommons_itsjatrophanow.pdf [5.4.09].


This section needed to draw largely on information provided by NGOs; hence, one has to be careful to generalize this view as a general trend for public opinion. Even more, as public opinion is not a homogeneous entity. However, NGOs and also farmers cannot be regarded as powerless actors within the Indian system, but as a potential source of mobilization against JBD. Their concerns and perceptions therefore need to be closely taken into ac-count.

4.3 Risk characterisation and evaluation

After looking at each risk individually, links and trade-offs between them are now analysed to arrive at a first judgement on their (in-)tolerability or acceptability.

4.3.1 Risk characterisation

Analyzing the case of large-scale JBD production in India against the criteria appointed in chapter 2.4, the following results emerge.

Inter-target variations and potentials for equity violations: The susceptibility to risks va-ries between (human) target groups and between value chain organisation models. While small and marginal farmers who take up Jatropha cultivation and bear all costs are more risk-prone (e.g. risk of income loss, negative impacts of plant diseases), large farmers and com-panies have more leeway to experiment with Jatropha. Additionally, target variation depends on the way states assume or buffer risks by providing grants and subsidies or by buying seeds at fixed prices. Risk-susceptibility of companies varies regarding the amount and na-ture of investment in the business (e.g. for setting up processing units, own plantations), the compensation via state incentives, the commitment to buy-back agreements and the depen-dency on single feedstocks. Impacts on the natural environment vary according to local or regional conditions (e.g. availability of water) as well as plantation and value chain models. Guha (cf. 1999, 104-5; also Ihlau 2008, 5) concludes that there is an increasing gap in India between rural people (especially small / marginal farmers, landless) on the one side and in-dustrialists, rich farmers, state officials and the growing middle class on the other, the prior being more dependent on local resources, the latter having large access to resources. This capacity is even fostered by state interventions like subsidies and policies. Therefore, atten-tion must be paid that the JBD business does not further add to this inequity. Compatibility with legal requirements: Limited cases of violations of legal requirements due to Jatropha have been reported. These reports mainly refer to the issue of land alloca-tion by states: common lands were given to companies ignoring the constitutional rights of local Panchayats institutions. It is feared that wasteland privatization will lead to further con-flicts and land rights violations (cf. Shiva 2008, 12, 23, 27, 36). In this case it must be ac-knowledged that the political decentralisation that started in the early 1990s by shifting more power to Panchayati Ray institutions, remains incomplete and is hampered partially by lack-ing accountability and by institutional weaknesses of these organisations when it comes to effectively claim the rights of the rural population and solve a fair land distribution (cf. Alten-burg et al. 2009, 44-6, 108). Moreover, concerns are raised that, even if states set fixed min-imum prices for seeds, farmers and collectors would be paid less (cf. ibid., 48), reinforcing the risk of an income loss for farmers. Additionally, cases of biopiracy related to Jatropha by

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international companies like D1 have been reported, and it is feared that further cases of violation of biodiviersity laws could take place in case of foreign companies trying to get ille-gal access to Jatropha accessions (cf. Shiva 2008, 17-8). It also needs to be analyzed how the toxicity of the plant and its parts as well as the use of toxic substances (e.g. methanol) in the processing stage might conflict with the national Factories Act, which regulates safety, health and welfare issues of workers in factories (cf. MoIB 2009, 691). There is a low proba-bility that if the problem of increased NOx emissions from JBD cannot be solved and vehicle emission norms get stricter, these norms could be breached. However, although India had already from the 1970s onwards been passing a whole series of environmental laws, their implementation and enforcement is still rather weak (cf. D’Souza & Peretiatko 2002, 84-5, 89) or has been partially abrogated to foster economic growth (cf. Stuligross 1999, 396). Risk-risk comparisons and -tradeoffs: There are several linkages between risks, which require a thorough assessment: Polaski (cf. 2008) for instance argues that rural people in India would be less affected by or even benefit from an increase in food prices which could be fostered by soaring biodiesel production. Thus, creating rural employment by JBD busi-ness could partly set off food price increases. However, there will still be losers, like the ur-ban poor. Similarly, there might be a trade-off between the loss of access to common lands for rural poor and rural employment generation in which the latter can set off negative im-pacts on the first. Additionally, a research discussion emanated only recently about a possi-ble risk-risk-tradeoff between emitting GHG emission and an improvement of air quality due to better biofuels, for a decreasing air pollution might speed up climate change, therefore further urging a substantial reduction of GHG (cf. Ramanathan & Feng 2008, 14246-9; Schellnhuber 2008, 14239). The impact of clean biodiesel use within these scenarios will depend on its impact on changing global air quality. Due to the still limited amount of biodie-sel in India and world wide (cf. WBGU 2008, 39-41), the current impact seems to be rather low. Furthermore, it seems that some risks have been receiving at least some acceptance in the past. For example, the use of irrigation in agriculture for the sake of the country’s self-reliance − although in some cases at the expense of limited resources − has been widely accepted. This is reflected in some state policies on Jatropha subsidizing and even demand-ing irrigation (e.g. Andhra Pradesh, Rajasthan, see Annex 5) and in the plans of the GoI (cf. PC 2002, 32-4; PC 2006b, 23) demanding an increase of irrigated area (cf. Bhattacharyya 2006; PC 2006b, 23; Shiva 2008, 35; Srivastava & Rehman 2006, 648-9). Similarly, an in-tensive use of chemical fertilizers is judged as

“an essential input to Indian agriculture for meeting the food grain requirements of the growing population [...] Government is committed to provide adequate fertilizer at afford-able price so that farmers do not face shortage of this critical input” (MoIB 2009, 617).

Discrepancies between risk assessment and perceptions: Several cases of identified discrepancies are summarized below (Table 33). Generally, judgements are hard to make as sound long-term knowledge is lacking for many issues.


Table 33 Discrepancies risk assessment and perception (Source: Own table).

Issue Risk assessment Risk perception

Rural employ-ment

High demand for employment as Jatropha is labour-intensive (but depending on value chain).

NGOs: employment loss.

Emission increase

High potential that JBD has lower or at least equal emission level than fossil fuels, but dependent on plantation type / land use change / value chain.

Partly NGOs / research / com-panies: life cycle emission high-er than those of fossil fuels.

Energy security

JBD will only have a small impact on the energy security due to its relatively low share in overall energy need (see: similarly for for-eign exchange savings).

Government / partly company: JBD can considerably improve energy security.

Hence, as many of the consequences of large-scale JBD production could not materialize due to slow business development, it remains to be monitored whether these discrepancies and other findings of risk assessment prove true in the long-term. This will be strongly influ-enced by upcoming policies, value chain organization models or plantation patterns: e.g. if Jatropha remains clearly restricted to ‘wasteland’, if it creates substantial rural employment and does not compete with food production for scarce resources, and if it even feeds back nutrients so that the risk of food security might not materialize to the extent envisioned by many NGOs.

4.3.2 Risk evaluation

Regarding political priorities for sustainable development in India, the two dimensions of economic development, and closely linked to the first, social development especially in terms of poverty alleviation and food security, have gained most attention in Indian politics in the last decades. This is clearly reflected in the priorities defined in the last five-year plans of the GoI. Since the beginning of the new millenium (and with the Xth plan) the GoI has been tar-geting a minimum annual GDP growth of 7 - 8%, to create an industry growth-friendly envi-ronment, with the intention to reduce poverty, one of the key goals since independence, and to create employment for the fastly growing workforce (cf. MoIB 2009, 753-60; PC 2006b, 2). In the recent years, a renewed emphasis on rural development is visible, reflected by a bud-getary increase of rural development programmes, especially for employment generating activities like NREGS. A second important goal is to foster the agricultural sector, i.e. by en-couraging contract farming (cf. MoIB 2009, 753-60, 783; Yamaguchi: 2005, 93), whereas environmental goals also present in this Xth plan remain focused on cleaning major rivers as well as afforestation via bio-diesel and JFM programmes (cf. MoIB 2009, 777-8). With re-spect to food security, this is a crucial concern of the GoI that has just launched a national mission on food security in 2007/8 and has set the goal to increase agricultural growth to 4% annually supported by a range of national grant schemes and demanding a ‘2nd green revolu-

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tion’98 (cf. ibid., 57-8; PC 2006b, 5). On the international scene India is among the critics of a shift of agricultural production from food to fuel crops (cf. WBGU 2008, 300). India is also among the early promoters of renewable energy, with a primary focus on ensur-ing energy security for the growing economy and rural development. The political relevance is reflected by India being one of the few countries that already had established a special ministry for renewable energy (MNRE) in the early 1990s (cf. gtz 2007, 311) and that the country started massive attempts to raise awareness for renewable energies (cf. MoIB 2009, 279-81). The need for renewable energy is mainly viewed to be a critical input for accelerat-ing the economic growth and improving life quality (cf. ibid., 260), while the dominance of fossil energy resources is still accepted:

“After coal, petroleum products remain the primary energy source in India, with their con-sumption increasing at a very steep rate. For faster development, the role of the energy sector is of paramount importance” (ibid., 263; similarly PC 2006b, 51, 53, 56 / 2006a).

Concluding, the issue of energy security will remain among the top priorities of Indian politics, especially as India is insisting on its right to ‘catch up with economic development’ (cf. Raja-mani 2008; Wagner 2007, 7, 12, 23). Environmental concerns have been neglected for quite a while despite the increasing degra-dation of environmental conditions and despite environmental protection being a key concept in Indian culture, especially within the national main religions like Hinduism, Jain or Budd-hism (cf. D’Souza & Peretiatko 2002, 81; Ravindranath et al. 2000; Stuligross 1999, 395-6). They have only recently been integrated as a top-priority on the political agenda. For exam-ple, in 2008 the Prime Minister launched a ‘National Action Plan on Climate Change’ (NAPCC) (cf. GoI 2008; MoIB 2009, 267)99 and a new national environment policy entered into force in 2006 (cf. MoIB 2009, 317). The strategic planning for the XIth plan also articu-lates the need for increased environmental protection,100 although in this document (cf. PC 2006b) environmental questions receive far less attention than issues of economic growth and rural / agricultural development. Environmental protection and economic growth are not per se seen as a contradiction “Rapid economic growth can intensify environmental degrada-tion [...]. With rapid growth we can have the resources to prevent and deal with environmen-tal problems” (ibid., 56). Yet it is also acknowledged that environmental protection shall not hamper economic growth (cf. ibid., 58),101 and it is rather treated as a means to the end of economic / agricultural growth.102 In civil society the issue of environmental protection has gained substantial support, reflected in the soaring number of environmental NGOs and in

98 The term ‘2nd green revolution’ hints at the ‘green revolution’ in India of the 1960s and 1970s, whose aim was to create self-sufficiency and surplus-production of food crops (cf. Braun et al. 2005, 2; PC 2002, 30, 32). 99 India insists on equal per capita rights to use environmental goods and to emit GHG (cf. Rajamani 2008). 100 “While in the short run there may seem to be a trade-off between environmental sustainability and economic growth, we must in the longer run, take recourse to the complementarities between environmental sustainability and human well-being. We have already seen that neglect of environmental considerations, for example, profli-gate use of water or deforestation, has devastating effects. The threat of climate change poses a real challenge to the well-being of future generations, a fact we can ill afford to ignore” (PC 2006b, 8). 101 “As we put in place a policy of environmental protection, we must also pay attention to the danger of creating a new license permit raj system […]. A comprehensive review of environmental clearance procedures is necessary to ensure that the system is transparent and avoids unnecessary delay. Unless this is done, the large increases in investment required for accelerated growth will not fructify” (PC 2006b, 58). 102 “Soil and water conservation measures are one of the essential inputs for increasing agricultural output in the country” (MoIB 2009, 67).


broad media coverage on related topics as well as in an increasing awareness about envi-ronmental problems, especially for air and water pollution leading to demands for stricter regulation for companies (cf. Ravindranath et al. 2000, 107-9; see chapter 4.2.2). The in-creasing strength and ability to set agendas by the civil society is also noted by the govern-ment (cf. PC 2006b, 1).

Reasons for choice of technology and possibilities for substituting the risk agent: Looking at JBD as a transport fuel, there are few alternatives in a mid-term perspective. Maintaining the dependence on fossil fuel imports is not a viable option, although it is most likely for the next years due to path dependency effects. However, dependence on oil is al-ready high (see chapter 3.1). Therefore, an increase of its use will further worsen the energy security scenario and its negative ecological impacts, e.g. on climate change, are well docu-mented (cf. e.g. Ramanathan & Feng 2008, 14248). Although many public buses already use natural gas as a fuel, this might not be a long-term option either, as import dependency on gas is high (cf. Wagner 2007, 8-10), whereas biogas is mainly needed for rural purposes in India (cf. gtz 2007, 317-8; Rajagopal 2006, 7; WBGU 2008, 47, 211-2). Other biofuels from 2nd or 3rd generation (e.g. Biomas to liquid, BtL) will still need considerable time to be mar-ketable at a large-scale (cf. Doornbosch & Steenblik 2007, 11; WBGU 2008, 41, 162); the same is expected for hydrogen energy (cf. MoIB 2009, 276). Additionally, – like in the case of gas run vehicles – this is rather an option for future vehicles and not for the already existing ones. This applies also to electric vehicles, which have recently been introduced into the In-dian market. However, they still play a marginal role in the transport sector (cf. Babu et al. 2007) and can develop their sustainable potential only if energy is derived from renewable resources, whereas in India renewable resources contribute only 5% to overall electricity supply (cf. gtz 2007, 305). Therefore, biodiesel as such can be a short-term solution without forgetting to look at the general picture: the need to increase energy efficiency, especially in an energy inefficient country like India (cf. MoIB 2009, 263), efficient public transport systems and developing more efficient next generation technologies.

Looking especially at a substitution of fuel feedstock, two options emerge, while edible oil resources can be already excluded due to the national food demand for edible oils (chapter 3.1) and also because of their high water requirements making them unsuitable for most In-dian regions (cf. Rajagopal 2008b). Fostering other non-edible TBOs could be a first option: the most prominent alternative often mentioned in interviews and the 2nd best option identi-fied by the PC (cf. 2003, 6) is Pongamia (Karanja), which is a tree originating from India and well-known in the country. It has slightly higher oil content than Jatropha and similar technical properties as a biofuel (cf. NOVOD 2005, 56 et sqq.) as well as similar agronomic features (suitability to wastelands but with higher rainfall / humidity needs). Like Jatropha, it provides high nutrient manure, but also animal fodder and fireweed and it has the potential to improve soil fertility as well as to foster afforestation. It is non-toxic but also not browsed by livestock. However, Pongamia has a considerably longer gestation period of up to seven or eight years compared to three years of Jatropha. Its seed prices vary between 3 and 9 Rs / kg and its SVO prices are also below those of Jatropha. Up to now it is not sufficiently researched as a biofuel feedstock (cf. Altenburg et al. 2009, 5, 7, 46; Rajagopal 2008b; TERI & gtz 2005, 6-7, 14, 30, 48, 56, 82, 88-9). Pongamia creates almost the double amount of costs for plantation

112 JANA LATSCHAN

compared to Jatropha (cf. NOVOD n.d.), making it a doubtful stand-alone alternative for small farmers, but a potential source for a mixed cultivation, especially as harvesting periods differ, and of multiple feedstock sourcing for processing. However, this bears the risk that prices for Pongamia seeds and SVO, for which a market is already there due to its use e.g. in the leather industry (cf. Altenburg et al. 2009, 32), considerably rise making biodiesel pro-duction less cost-effective. A second option is to increase the share of vehicles which can run on bio-ethanol, like the Brasilian example of flex-fuel cars has demonstrated. It is doubt-ful, whether 1st generation bioethanol from sugar cane, the current 1st choice feedstock, is a solution under Indian conditions, even though it is commercially more viable than Jatropha. It causes severe negative environmental consequences being resource intensive (especially concerning water consumption in a water stressed environment), prone to pests, causing severe water pollution and directly competing with food production (cf. TERI & gtz 2005, 35, 88-9; WBGU 2008, 97-9). On the contrary, sweet sorghum could be an option (if cultivated in crop-rotation and soil fertiliy protective manner) due to its lower input needs, lower costs compared to sugar cane and ability for multiple cropping, which has not been fully explored in India so far (cf. ICRISAT 2007a; Rajagopal 2006, 6; TERI & gtz 2005, 9).

Risk-benefit balances: It also needs to be analyzed further, to which extent Jatropha planta-tions can contribute to soil rehabilitation and make more land available for food production, mitigating the risk of food insecurity. However, this benefit will strongly depend on the type of plantation (density, inputs, intercropping) and on the long-term allelopathic effects of the plant. Mostly cited benefits of a possible large-scale JBD business are employment genera-tion and the supply of large amounts of oil-cake, which could satisfy two growing needs: firstly, the demand for bio-fertilizers to ensure soil fertility and improve food supply and, se-condly, the need for clean bio-gas for rural applications (cf. Chandra et al. 2006; Rajagopal 2008b; TERI & gtz 2005, 61). Furthermore, it needs to be seen, how assumed savings in GHG and PM from JBD can really compensate negative environmental impacts from an in-creased fuel demand in absolute terms. Potential for conflict resolution or social mobilisation: As has been explained in the pre-vious chapters, a major source of conflict can originate from disputes over inputs, first of all, access to land and secondly, with environmental conditions and the availability of natural resources constantly worsening (cf. Ravindranath et al. 2000, 100-1, 108), access to water and other agricultural inputs (cf. ibid., 110), in addition to the over equal access to the energy resources of the country. For the first two aspects, conflict resolution is seen in a broad par-ticipation of accountable and strong PRI in the decision-making processes about local re-source allocation (cf. Altenburg et al. 2009, 118; WBGU 2008, 313), and for the latter an in-creased supply of alternative local energy sources could reduce vulnerability. The following Table 34 briefly summarizes main findings to classify risks as acceptable (A) or (in-)tolerable (I/T). Assumptions based on the scenario ‘agro-business’ are taken into ac-count, as this scenario implies the large-scale production of JBD as transport fuel. Positive consequences are ex ante considered as acceptable.


Table 34 Synthesis: risk evaluation and characterization under agro-business scenario (Source: Own

table).

Risk Risk Profile Reduction (R)/ Compensa-tion (C)/ Tradeoffs (T)/ Benefits (B)

Social mobili-zation

Result

Employment loss

Low probability / complexity / ambigui-ty / uncertainty

R: via public schemes, e.g. NREGS; C: Income genera-tion / compensation

Medium A

Wasteland reclamation

Medium complexity and uncertainty but normative & inter-pretative ambiguity; medium probability

B: reclaim land for food pro-duction; T: lock up of was-teland for rural poor / lives-tock, absolute increase irri-gation needed

High if land grab per-ceived

T

Soil improve-ment

Medium complexity, but epistemic and aleatory uncertainty

R: high density / input plan-tations ; C/B: Reclaim land for food production

Low A - T

Land grab Low uncertainty, high ambiguity; up to high damage potential

R: community participation; C: employment generation

High T - I

Less pastoral-ism

High damage poten-tial, no uncertainty / ambiguity

R: community participation; C: employment generation, weed

High T - I

Food insecuri-ty

Medium probability, high complexity & uncertainty, interpret-ative ambiguity

R: limitation of JBD to was-teland; T: conflict on wastel-and; price increase = more income food producer; C: employment, manure, import

High if damage linked to JBD

T

Energy secu-rity improved

Low-medium proba-bility for positive im-pact; high complexity / uncertainty / ambi-guity

C: next generation fuels (long-term view); B: ForEx-Savings; T: no change of energy consuming growth path

Low A

ForEx saving Low-medium proba-bility for positive im-pact; uncertainty

B: opportunity costs re-duced; R: oil price increase

Low A

Business fail-ure

Low probability, high damage; high com-plexity; uncertainty

R: subsidies / grants / poli-cies, QPM

Medium - high

T - I

Income loss Medium – high prob-ability & damage; high complexity

C: grants, subsidies, insur-ances; R: loans, QPM, tech-nical support

High I

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Emission in-crease

Low probability, me-dium damage; high complexity & uncer-tainty & ambiguity

R: GHG optimized value chain, NOx catalysts; T: NOx increase; higher GHG from fossil fuels

Medium A - T

CDM Medium benefit po-tential, some uncer-tainty / ambiguity

B: additional income No A

Particulate matter

Low - medium benefit potential, some un-certainty

T: Climate change increase; B: air quality & health im-proved; R: amount of ve-hicles grows

No A

Biodiversity loss

High uncertainty & ambiguity; high prob-ability on local level; complexity

R: inter-cropping, lower plantation density; T: less income with lower density; C: intercrops

Low T

Allelopathic effect

High complexity & uncertainty; local re-versible damage, medium probability

C: income from JBD Low T - I

Diseases & pests

High complexity & uncertainty; local re-versible damage, medium probability

R: (bio-)pesticides, less in-tensive plantation, genetical-ly modification of seeds; C: insurances

Medium T - I

Afforestation Low probability; some complexity & epistem-ic uncertainty

C: plants more suitable for afforestation; T: lock up of forest areas for rural poor

Low A

Water exploi-tation

High complexity; un-certainty; long-term damage, medium - high probability

R: water charges & regula-tions; T: wasteland rec-laimed

Medium T - I

Fuel safety Medium -high benefit potential; low uncer-tainty

T: safer than fossil fuels; R: low blends in diesel

Low A

Intoxication Depends on individu-al situation, simple, but partly ambiguous

R: use of non-toxic varieties, safety measures, awareness raising

Medium A - T

For integrating all findings, the risks identified are applied to the IRGC traffic light diagram (seeFigure 6) classifying them as acceptable or (in-) tolerable. The location of risks identified within the traffic light diagram does not represent a certain ranking between risks or prefe-


rence identifications. It represents the individual assessment of probability and extent of con-sequences of each risk selected.

Figure 6 Traffic light model including large-scale JBD risks (Source: Own figure; traffic light model from

IRGC 2005, 37).


Jatropha curcas has the potential to become a sustainable energy solution with regard to the

criteria laid out at the beginning, as the following first summary (Table 35) shows.

Table 35 Intermediate assessment of JBD against sustainable energy criteria (Source: Own table).

Criteria Intermediate assessment & need for risk reduction measures

Access equity JBD – once it becomes cost effective and competitive – can ensure that energy remains accessible & affordable; focus on its use could be reconsi-dered as suitable for rural energy.

Health & safe-ty

JBD is safer / not less safe than fossil fuel, however the issue of intoxica-tion needs attention.

Efficiency There is still need to increase efficiency of the process & cost-effectiveness.

Diversification JBD as a renewable, non-carbon energy resource can contribute to diversi-fication, although at a limited extent due to its land requirements (like other biofuel crops).

Energy secu-rity

JBD contribution to the Indian energy security will remain limited, but poten-tially higher impact for transport fuels.

GHG emis- JBD has the potential to foster both: reduction of GHG emission and im-

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sion,

air quality

proved air quality, the prior depending strongly on the value chain organiza-tion & land use changes.

Water / soil

biodiversity

JBD has the potential to rehabilitate soils, but need to take care that this does not happen at the expense of water stress and biodiversity loss (e.g. by input intensive mono-cropping).

Compliance JBD is in line with national laws, also accepted under CDM; risk of rights violations of small / marginal farmers and rural communities require consid-eration.

Participation Participation still varies depending on value chain model applied, but high requirement as many plantations use common property resources.

Social / rural development,

food security

If restricted to wasteland and prudent use of inputs, no direct competition with food crops; high labor requirements of the plant are important advan-tage to create rural employment; JBD also source of rural electrification.

The analysis also demonstrated that there are some risks requiring thorough risk manage-ment and risk reduction measures to realize the full sustainable energy potential of the JBD business. To give insights into how companies can contribute to fulfilling this demand and how they can deal with environmental and social concerns of civil society in order to prevent a possible social mobilization against the JBD business, will be the task of chapter 5.

MANAGEMENT OPTIONS & STRATEGIES FOR SUSTAINABLE ENERGY FROM JATROPHA 117

5 MANAGEMENT OPTIONS & STRATEGIES FOR SUSTAINABLE ENERGY FROM JATROPHA

The following chapter will analyze what sort of management options can be taken up by the business sector to reduce risks and also increase benefits, starting with an overview on what has been done so far by the actors involved, predominantly by companies and governmental organizations.

5.1 Current approaches of risk management for JBD

Different risk management efforts have been identified. Firstly, when looking at the govern-ment level, there is a considerable deviation between different states, presumably, due to an absent coherent central policy on biofuels. Looking at these state-wise attempts for risk re-duction (see chapter 3.2.2 and Annex 5), a variety of steps focussing on the risk agent as well as its targets has been identified in this thesis. For example, to ensure rural employ-ment, some refer to the promotion of state and central funding schemes like NREGS to en-courage employment of local unskilled workers. Some states provide subsidies and grants for seeds and inputs (e.g. drop irrigation system), grow seedlings in own nurseries to ensure a certain quality level or fix minimum support prices to reduce the risk of income loss and business failure for farmers as well as for enterprises. In few cases risks are also transferred from one risk target to another, e.g. when – like in Andhra Pradesh – companies are de-manded to ensure a minimum rate of plant survival if they do contract farming. Additionally, some states have adopted special rules and comittees to decide about land allocations (e.g. Uttarakhand) to avoid risks of land conflicts. Cases of risk avoidance also exist in those states that opt for other feedstock than JBD or for a multiple biodiesel feedstock approach (e.g. Andhra Pradesh, Karnataka). Avoidance or reduction of environmental risks like an in-crease of emission or overexploitation of natural resources does not seem to be a dominant focus of any of the policies analyzed, although some state policies briefly refer to related is-sues (e.g. Rajasthan).103 At the central level (see also chapter 3.2.1 and 4.1.2) three ap-proaches prevail undertaken by ministries, public banks and national research institutes. One is to focus on research to improve quality and suitability of the risk agent (Jatropha) in order to increase its commercial viability. A second is to provide grants and subsidies for TBO plantations, also in order to support JBD production to become commercially viable, to in-crease investment in plantations and to reduce risks of business failure. For example, the NOVOD scheme includes a 50% bank loan, 20% beneficiary’s share and 30% subsidy from NOVOD (cf. NABCONS 2006, 11; TERI & gtz 2005, 24). NABARD too provides loan assis-tance via its Rural Infrastructure Development Fund also applicable for biodiesel plantations (cf. Altenburg et al. 2009, 54; TERI & gtz 2005, 24). A third approach made by NABARD is to establish some sort of sustainability criteria in the lending process as part of its Terms of Conditions. However, some of these criteria appear to be rather vague, as for example the

103 The Rajasthan Biofuel policy states in case of land lease “[t]hat the lessee shall take all measures which are required for pollution control & environment protection and shall strictly adhere to pollution laws/environment law applicable for the time being in force” (GoR 2007, 13). In contrast land lease rules in the state of Chhattisgarh do not even mention such issues (cf. GoC 2006).

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criterion ‘sustainability’ is not further operationalized and would require further concretization. Additionally, fully monitoring compliance is difficult (cf. Int. NABARD). Similarly, the purchase policy of the MoPNG includes first steps for establishing sustainability criteria for the JBD business. The policy highlights that biodiesel production must ensure food security by provid-ing new income sources for rural people, and that the PRI must assume a strong role in as-signing land for Jatropha cultivation, identifying beneficiaries and supervising the process (cf. Adholeya & Dadhich 2008, 164-5; MoPNG 2005, 2-3).

Business activities so far mainly centered on economic risks for the companies and for far-

mers within the upstreaming part as well as on technical risks of the downstreaming part.

Several approaches have been identified. Firstly, companies develop different business /

farming models (cf. Int. D1-BP) suitable for different local conditions. They also try to acquire

larger patches of own land, like IOC which cooperates with Indian Railways for the lease of

land (cf. Adholeya & Dadhich 2008, 27, 33), or Medors (cf. Int. Medors). Secondly, some

companies start opting for a multi-feedstock approach in order to decrease dependency on

Jatropha seeds (cf. Int. Growdiesel, ICRISAT 2007b, 26). Southern Online Technologies for

example feeds its biodiesel plant in Andhra Pradesh with raw materials such as acid oils,

animal fatty acids or non-edible vegetable oils from Neem instead of the required input from

Jatropha or Pongamia, which is still not sufficiently available (cf. Adholeya & Dadhich 2008,

28; Gonsalves 2006, 9). Thirdly, some companies, like Nandan, Mission Biofuels or D1-BP

Biofuels, try to act as a facilitator and assurance for farmers via buy-back-agreements to gain

access to loans to encourage further plantations (see Figure 3). Though these buy-back

agreements are judged as an income assurance for the farmers (cf. ICRISAT 2007b, 25-6;

Int. D1-BP; Nandan n.d., 4; Rosen 2007), this requires further assessment as cost-

effectiveness for the farmers must be ensured. Fourthly, few companies focus on cooperat-

ing with PRI for land and farmer identification, such as BREL (cf. Singh 2008a) and partly

D1-BP while others rely on a network of field officers, franchisers and/or village level coordi-

nators (cf. Int. D1-BP / MB / Medors) to interact directly with farmers. Additionally, the inter-

views and literature research results revealed different approaches of guidance and trainings

for farmers to establish further cultivation practices ranging from leaflets to intensive training

efforts (cf. Int. D1-BP / Humana / MB; ICRISAT 2007 b, 26; Rosen 2007). One focus of some

companies is to participate in government committees to monitor and ‘advise’ on biofuel poli-

cy issues (cf. Int. D1-BP / Growdiesel). As regards the downstream part, companies prevail

in testing various forms of applicability: Daimler for instance tested its cars with a biodiesel

blend in different climatic zones of India to demonstrate the technical feasibility of biodiesel

(Int. Mercedes). Similarly, Mahindras & Mahindras tested blends on passenger cars (cf. HT

2007z), TATA on its company busses (cf. Adholeya & Dadhich 2008, 27) and Southern Rail-


ways on its locomotives (cf. Ariyanchira 2005). The most cited example104 is Indian Railways,

whose aim is to plant Jatropha along its railway tracks to blend its diesel. The company un-

dertook a pioneering test already in 2003 running a train with a 5 per cent blend of biodiesel.

Regarding the participation of other stakeholders within the risk management activities of the governmental and corporate sector, two patterns prevail. The government focuses on inte-raction with companies (e.g. via committees and hearings), and even more with research institutions (via funding research networks e.g. by NOVOD or DBT or conferences). Compa-nies – apart from the lobbying of the government mentioned before – concentrate on cooper-ation with scientific experts (e.g. research project of BP and TERI or Daimler with IFEU, CSMCRI and CSIR), some with banks (cf. Int. NABARD) and (diagonal)105 cooperation with other companies through JVs (e.g. BREL as a result of such a cooperation, see chapter 3.3). So far cooperation with NGOs, especially in the form of a critical dialog, has not taken place to a visible degree, as has been confirmed in the NGO interviews (cf. Int. CECOEDECON / CSE / SPWD; exceptions are Mercedes and Nandan). Companies seem to prefer to interact directly with farmers or limit their interaction with NGOs to requests for seeds or land access (e.g. Utthan and SPWD have been approached in this regard). Similarly, the government is criticized by NGOs for a lack of consultation with civil society on the biofuel policy (cf. Bhutani & Kohli 2008b; Int. CECOEDECON / CSE). Some companies admitted that their corporate communication efforts about the JBD business have been low, as there was not much to report about, whereas some NGOs criticize corporate communication about Jatropha as be-ing too ‘glossy’.

As the examples above show, there are already some efforts of risk management and com-munication visible, but a coherent approach is still missing. Hence, the following sub-chapters will firstly analyze, which role business can and should play in risk management and, secondly, appropriate risk management options will be generated, assessed and inte-grated, resulting in a feedback on risk management strategies developed by the IRGC.

5.2 Companies: a crucial actor for sustainable energy & risk management?

Although many studies stress the importance of policies and therefore state actors in ensur-ing the sustainability of JBD in India,106 this analysis argues that ‘business’ does and should have a role to play in the question whether JBD will become a source of sustainable energy or not as well as in risk management in general. Firstly, it is widely agreed, that the JBD poli-cies will fail, if they are not being supported by local farmers (cf. Francis et al. 2005, 22). This argument strengthens the relevance of corporate risk management, as companies strongly influence the value chain and hence the ability of (short-term) income generation especially 104 See e.g. descriptions of the example in Adholeya & Dadhich 2008, 32-3; Ariyanchira 2005; Chandel et al. 2007, 371-2; Francis et al. 2005, 18; Negi et al. 2006, 7. 105 This term refers to one of three types of cooperation: vertical cooperation takes place between companies and suppliers, horizontal cooperation includes a company and its competitors, whereas diagonal cooperation links a company with actors outside the core market (e.g. NGOs) to achieve goals outside the core business (e.g. on the social / political level) or to establish new business cases (Schaltegger & Petersen 2007b, 15-6). 106 For example: “Whether or not these effects materialise depends to a large extent on policies. As has been illustrated, policies can design subsidies in ways that stimulate or inhibit the economic sustainability of plantations, […] and they can increase or reduce participation by local villagers and thereby increase or reduce the risk of displacement” (Altenburg et al. 2009, 115), see also footnote 1 in the introduction of this thesis.

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for the huge amount of small farmers; a factor which is seen as determining the acceptance of Jatropha by farming communities (cf. Altenburg et al. 2009, 113; ibid., 22). Secondly, through value creation, companies directly impact on many of the sustainability criteria as value creation does not take place without social and environmental burden added (cf. Schal-tegger et al. 2003, 64; Schaltegger & Sturm 1990, 280). Thirdly, companies have a strong ‘enlightened’ self interest in risk management: On the one hand they have to rely on a func-tioning business environment including ecological aspects and inputs (cf. IRGC 2007c, 13) as well as socio-economic factors. On the other hand, companies can generate gains from risk management, like a better cost control or increased knowledge (cf. Schaltegger et al. 2003, 203; Thorpe & Prakash-Mani 2006, 448).107 Business management has to pay appro-priate attention to the concerns of its stakeholders; otherwise it runs the risk that “the process of value creation will be impaired” (Schaltegger et al. 2003, 37, cf. also 15-6, 108). Obviously, not all stakeholders are of equal importance for a company (see Annex 11). In this specific case it has been shown that, to start with, the ability of companies to organize completely vertically integrated value chains is hampered as the options to acquire land, principally for foreign companies, and, hence, to autonomously ensure a stable feedstock supply, are li-mited. Therefore, companies depend on the support of and cooperation with local actors, especially farmers (cooperatives), PRIs and SHGs and sometimes other companies. Se-condly, they have to act within a given legal and policy framework and seek to maximize their freedom of action (cf. Schaltegger et al. 2003, 16), thereby depending on the support or at least acceptance of governmental actors. Thirdly, it has been shown that many doubts re-main regarding long-term (ecological) implications of Jatropha which are open to further scientific advancement. Hence, input and knowledge from science, particularly on the quality improvement of the plant and process optimization, but also from laypersons, on the potential for social amplification if problems remain unsolved, are critical. Finally, it has been analyzed that some NGOs have the potential to influence public opinion about the JBD business na-tionally and abroad, therefore challenging the ‘social legitimacy’ and the success of the JBD business. Hence, self-retention as a possible risk management strategy does not seem to be viable for most risks.

However, risk management by corporate sectors is also limited, as some of the risk man-agement options proposed by the IRGC-RGF are beyond control of an individual company (e.g. regulations, policies, taxes, setting of binding norms for the sector) and can only indi-rectly be influenced with an uncertain outcome. However, bargaining strengths could in-crease if strong cooperation between companies is realized. Moreover, companies are con-fronted with limited resources in terms of finances, personnel, time and sometimes know-ledge about local conditions, above all in a country as heterogeneous as India. Specifically the case of JBD in India is confronted with the situation that at current low fossil fuel prices competitiveness is critical. The previously selected agro-business scenario assumes that, following the current economic slow-down, oil prices will in the medium-term increase again, creating more leeway for the JBD business.

107 See also the argumentation of Lankoski (cf. 2006, based on the assumptions of Porter and van der Linde) and Spirig (cf. 2006) arguing that ‚being green and social‘ potentially increases a company’s economic performance; this argumentation is confirmed by Thorpe & Prakash-Mani (cf. 2006, 457-8) for emerging markets like India.


Concluding, (cost) efficiency108 and effectiveness of any risk management option are thought to be crucial parameters for the business sector, followed by aspects of ensuring the opera-tional environment and ‘license to operate’ reflected in the sustainability criteria as will be further discussed in the subsequent chapter.

5.3 Options for enhancing the sustainable energy scenario: overview and assessment

The following chapter will focus on those negative consequences that have been identified to be intolerable or only tolerable requiring risk reduction measures. The IRGC-RGF recom-mends to group risks according to their risk classes (simple, complex, etc.) to draw from ge-neric risk management strategies. As the following figure shows (Figure 7), many of these risks are difficult to be grouped just under one risk class, i.e. no clear indication can be made whether they are only e.g. complexity- or uncertainty-induced. Risk management options hence might need to draw from different generic risk management strategies. Secondly, there is a trend that many uncertain and complex risks are at the same time to some degree ambiguous, although not inevitably vice versa.

Figure 7 Classification of risks to risk classes (Source: own figure, cf.Table 6).

Before further management options are created, it needs to be clarified how they will be as-sessed. As stated in chapter 2.4, the IRGC criteria will be taken into account. Following the research question of this analysis, the IRGC criterion ‘sustainability’ will be further specified by applying the combined set of criteria for sustainable energy. These criteria need to be weighted against each other. Renn & Schweizer et al. (cf. 2007, 104) propose to take ‘effec-tiveness’ as the core criterion. Additionally, as options are made up from the business sec-tor’s point of view, their efficiency (in terms of the proposed management options as well as impacts on the efficiency of the production process to maximize eco- and socio-efficiency109) is assumed to play a major role. Therefore, these criteria will be weighted three times higher

108 A cost efficiency strategy is a strategy that selects those riks management options that maximize the risk re-duction potential per monetary unit within a specific cost dimension (cf. Renn & Schweitzer et al. 2007, 98-9). Schaltegger et al. (cf. 2003, 28, 30, 198) similarly assume that sustainability oriented companies need to reduce negative social and environmental impacts in an economic way and that risk prevention is an issue of efficiency. 109 Eco-/Socio-efficiency are the ratios between economic value creation and environmental/social impact added (Schaltegger & Burritt 2005, 191-2).

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compared to others. As has been previously exemplified, India is faced with a stress of natu-ral resources and, as issues of rural/social development and food security attain high political priority, related criteria will be weighted double. The latter is in line with priorities given to comparable sustainability criteria of biofuels by TERI and gtz (cf. 2005, 61-2) for the Indian case and specifically Jatropha. Minimum thresholds need to be set for each criterion. It is assumed that not all options can fulfill all criteria. However, it is deemed necessary (following a ‘do no harm’ approach) that each option must at least be neutral or have a positive impact on the priority criteria defined (those weighted double / triple) along with achieving an overall positive sum of all criteria assessments. For this purpose each option will be ranked on a scale from ‘-2’ (strong negative impact) to ‘+2’ (strong positive impact), with ‘0’ implying neu-trality or an equilibrium of advantages and disadvantages, in addition to an in-depth descrip-tion of options.110 A full overview of all criteria and their weight is given in Table 36.

Table 36 Assessment criteria for management options (Source: own table, drawing partly on IRGC

2005, 42 for minimum requirements of CIs and on RSB 2008 for minimum requirements of CsE).

Criteria IRGC (CI) Minimum requirement

Criteria sustaina-ble energy (CsE)

Minimum requirement

CI-1 Effectiveness (x3)

Option largely achieves desired ef-fect

CsE -1 Access eq-uity (x2)

Access to / affordabili-ty of energy main-tained

CI-2 Efficiency (x3) Option requires low resource input to be effective

CsE-2 Health &

safety (x2)

Safety of production maintained

CI-3 Minimization of external side effects

Does not infringe on CI-4/6 & CsE-2/6/7/10

CsE-3 Efficiency (x3)

Production remains efficient / cost-effective

CI-4 Fairness Option burden largely shared in a fair way

CsE-4 Diversifica-tion

Share of non-carbon / renewable energy stable

CI-5 public accep-tance

Accepted at least by option affected groups

CsE-5 Energy secu-rity

No import increase

CI-6 ethical accep-tability

Does not infringe mor-al principles

CsE-6 GHG emis-sion, air quality (x2)

Lower level than fossil fuels (direct impacts)

110 Following this logic, it could be argued that energy security (in terms of less imports and more diversification of energy resources) is a key concern in India as well. However, as JBD as such already contributes − though to a marginal extent − to this aim, these are not additionally weighted.


CI-7 Political & regula-tory implementabilit

Not applied, as covered by CsE-8

CsE-7 Water / soil sus-tainability, biodiversity (x2)

Lower level than fossil fuels or other biofuels

CI-8 Sustainability Not applied, as specified by CsE 1-10

CsE-8 Compliance No violation of exist-ing national rights / policies

CsE-9 Participation (x2) Stakeholder participa-tion at least possible

CsE-10 Rural devel-opment, food security (x2)

No job loss, no direct food competition

In a next step, these assessment criteria are applied to possible management options, ana-lyzing each risk separately.

5.3.1 Management options for a sustainable use of ‘wastelands’

As the issues of ‘wasteland reclamation’, ‘land grab’ and a ‘decline of pastoralism’ are closely interlinked, for they all depend on how and which ‘wasteland’ is used, these risks will be dealt with in a joint approach. Following the uncertainty induced strategy, the IRGC-RGF foresees for the prior two risks (as being uncertain and ambiguous) that risk targets need to increase resilience and that, regarding the risk agent a precaution based approach should be fol-lowed. Risks targets in this case refer to mainly small / marginal farmers, and landless people, whereas the risk agent is mainly the transfer of ‘wasteland’ or common land for Ja-tropha plantations. This implies that these areas should be used to the lowest extent possible (containment, ALARP). This however is ex ante viewed to highly conflict with the general goal to limit plantations to these areas (to avoid food insecurity etc.) and, therefore, does not seem feasible as a strategy. Hence, one needs to look at the management strategy for am-biguous risks proposing a discourse based conflict resolution model supported by a high de-gree of participation of a broad range of stakeholders. Similarly, the risk of a decline of pasto-ralism, which has been judged as being simple to complex, cannot be dealt with by the strat-egies proposed under the respective classes. It rather demands an uncertainty-induced management strategy and a discourse which at least includes the affected groups (shephe-rds).111 This translates into the following management options: As the main hazard for lives-tock loss is the loss of access to fodder, compensation schemes can be thought of, like using weed as a substitute for fodder. Weed grows between plants and needs to be removed any-way.112 This can be undertaken by local people without any additional costs incurring neither

111 In an iterative process this might indicate that the classification of this risk might require reconsideration. 112 This option is only possible, if no uncertainty remains about the effect of toxic components of Jatropha on weeds. Detoxification of oil cake and commercialization as cattle feed as proposed by some to decrease costs of JBD production (cf. Francis et al. 2005, 22), is presently not considered as detoxification is still only possible at laboratory scale and expected to be very expensive if done on large-scale (cf. Jongschaap et al. 2007, 15).

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for the company nor for the local population based on a mutually agreed extraction process. Besides, intercrops could compensate the loss of fodder access but impact on the agronom-ics of the plantation (e.g. less density / yields per ha (cf. Francis et al. 2005, 19), see Table 38). More importantly, the decision-making process for land allotment / lease and the follow-up monitoring have to involve accountable PRIs (cf. Altenburg et al. 2009, 118-9) and could be supported by a) mediators or NGOs to agree on what is ‘wasteland’ in the respective area113 and who have been the traditional beneficiaries, as well as by b) experts who counsel on the appropriateness of a given area for Jatropha plantation (e.g. based on its agro-climatic conditions, possible resource conflicts). Additionally, rural communities could be partly compensated for their access loss to ‘wasteland’ if companies commit themselves to employ local workforce or offer fair contract farming models (cf. Braun & Meinzen-Dick 2009, 3).

There is also a vibrant discussion about certification of the biofuel business and many inter-national bioenergy certification schemes are currently being developed (cf. Doornbosch & Steenblik 2007, 39; see chapter 1.2). However, till date none of them is fully developed and internationally accepted (cf. WBGU 2008, 224). Taking the perspective of individual compa-nies, this analysis therefore has to refrain from proposing this option for the time being, but recommends its future reconsideration. At present, it is proposed to develop a Code of Con-duct (CoC)114 (in conformity with basic criteria of existing comparable codes of conducts and international standards in the making)115. If JBD is planned to be exported, this could trans-late in the medium-term into an asset.116 Yet, if commercialization remains restricted to the national market additional costs due to implementing the CoC must be carefully considered against a loss of competitiveness, due to the fact that till date no price premium for sustaina-ble biofuels is paid, but only a single price for all JBD producers (see also lobbying option inTable 38). However, CoCs can stabilize supplier relations (cf. Schaltegger & Petersen 2007b, 16), an effect which is required in the Jatropha value chain.

113 As explained earlier there is no single definition for wasteland and it also contains a range of soil types. 114 Limitations of CoCs are well documented and acknowledged, especially, if they are used for ‘green washing’, economic benefits are low and self-control of the branch is weak (cf. Schaltegger et al. 2003, 104). 115 E.g. Roundtable on Sustainable Palm Oil (www.rspo.org), Roundtable on Responsible Soy Association (www.responsiblesoy.org/), Better Sugarcane Initiative (www.bettersugarcane.org) (see for an overview on these and other (national / international) certification schemes and concepts Fleschenberg 2008). Also the Fair Trade Labelling Organisation is currently doing a feasibility study on fair trade certified Jatropha from Africa. 116 E.g. the EU decided to adopt sustainability criteria for biofuel imports (EP 2008, § 17). Though JBD meets US and EU technical fuel standards (Achten et al. 2008, 2), the option of exporting JBD has not been included here separately, as currently indications prevail, that the GoI might hamper the export of biofuels. However, once the biofuel policy will be available this aspect requires reconsideration.


Table 37 Option assessment for wasteland use related risks (Source: own table).

5.3.2 Management options to reduce income loss risks & increase economic viability

The issues of ‘business failure’ and ‘income loss for farmers’ can to a large extent be dealt with as being interrelated. These risks have been classified as complex to uncertain. In addi-tion to the assumptions for uncertain risk strategies mentioned before, complex risk strate-gies aim at improving the buffer capacity of the risk target (here: farmers and companies) and at gathering all available evidence about the causal chain of risks. This translates into the following options (see Table 38Table ): One of the main reasons for farmers running the risk to lose income, respectively that costs are higher than the return, results from yield fail-ures, too low yields particularly if planted under rain-fed conditions (susceptible to droughts) or attacks by diseases and pests. Therefore, companies could act as facilitators for micro-insurance systems. Similarly, state-subsidized crop, farm or weather micro-insurance sys-tems already exist in India (e.g. National Agricultural Insurance Programme − NAIS), but their scope is limited to few regions, to farmers having an active bank account (as insurances are linked to loans), to small amounts insured in addition to their questionable effectiveness (cf. Gunaranjan 2007, 175-9; MoIB 2009, 355-7). Consequently, few farmers have access to these options and insurance companies often do not have a sufficient outreach in terms of distribution networks. If companies active in a specific region act as facilitators, they could enhance trust in Jatropha plantations, reduce income loss risks, and build up more stable relationships with farmers. Parts of the insurance premium or expected subsidies could cover transaction costs. However, efficiency and effectivity strongly depends on the design of the system, premium and claim calculations and a strong backing by an insurance company.117 Moreover, micro-insurance systems cannot be a stand-alone solution and must be comple-mented by other risk reduction options like technical assistance (cf. Gunaranjan 2007, 180; Schaltegger et al. 2003, 202). Therefore, further options will be generated and assessed be-low.

Other major hazards are high initial investment costs, low quality planting material (QPM), high input needs during cultivation, lack of knowledge about agronomics and pressure on purchase prices for seeds by companies. For this reason, risk management options must address these and can include intensified research on hazards, intensive technical training 117 See experiences from other micro-insurance pilots in India and lessons learned in Gunaranjan (2007, 176-8).

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for farmers by companies adapted to local needs (e.g. languages, local training habits), and the establishment of locally adapted cultivation standards including input standards for opti-mizing sustainable input-output-ratios, or the exclusive provision of QPM. The latter is built on the assumption that a) effective and efficient quality checks are in place, and b) selective breeding (cf. Francis et al. 2005, 22; Kaushik et al. 2007, 311) or tissue culture propagation will increase quality (cf. Int. DBT /Medors). Further options include: QPM should not be given completely free of charge to increase ownership (cf. Altenburg et al. 2009, 119) but at rea-sonable, maybe differing price levels. The decentralization of the value chain should be con-sidered to allow for more value addition on the local level, hence income generation (see Table 41). Other options are arranging for fixed price buy-back agreements at competitive price levels (currently around 5-6 Rs / kg seeds) including a quality premium, or encouraging inter-cropping either with other TBOs (to allow for multi-feedstock sourcing) or food crops (but with a need to reduce density of plantations, hence lower yields/ha)118 and limiting culti-vation with small farmers to small land patches (e.g. hedges) as long as QPM is not availa-ble. To increase the profitability of the business for companies, more research is required to improve processing and to establish performance standards for technological and chemical processes, as well as for increasing the efficiency of expelling oil.119 The latter is linked to a trade-off with local expelling, as local expellers tend to be less efficient (cf. BAIF 2005, 23) though it creates local income. Other options to increase profitability are the reduction of energy demand for transesterification and the increased use of by-products within processing or their commercialization120 (cf. Francis et al. 2005, 22-3; see for these options also Table 41). Companies could – as a form of risk avoidance – rethink their competitive strategy shift-ing from the current attention to the mass market of fuel supply to niche markets, like “infra-structurally remote regions with inadequate fuel supply, such as far-flung islands, pollution-free zones” (ibid., 23) or other markets like rural electrification projects (cf. Kaushik et al. 2007, 311) by using the SVO.121 Another option, although with questionable effectiveness, is the lobbying for an end of subsidies for fossil fuels and the inclusion of externalities in their pricing or lobbying for better JBD support policies. The first might be problematic as some companies involved in the business or their parent company are simultaneously commercia-lizing fossil energy carriers. Companies should also to the largest extent possible make use of existing support schemes and facilitate access of farmers to them (e.g. NREGS).

Looking at these options (see Table 38), it becomes obvious that some of them form part of simple risk strategies (e.g. standards, trainings). Whatever is given preference, it is important to adapt them to highly differing local circumstances, given differing agro-climatic and socio-economic parameters (cf. Altenburg et al. 2009, 121-2). Thus, based on complexity-induced strategies, an epistemological debate is important as far as lacking knowledge about agro-nomics on technological improvement potential is concerned in order to generate sound as-sumptions (above all on the still missing competitive input / output ratios for plantations under 118 Afore, remaining uncertainties about the long-term effects of Jatropha on soils and (especially edible) inter-crops need to be solved (e.g. by timely adaption of planting intercrops) or at least reduced to an acceptable level. 119 Cf. Achten et al. (2008, 7-8, 11-2) for an overview of options to increase the efficiency of processing. 120 Some researchers assume that especially oil cake can be sold at 1-2 Rs / kg as manure and Glycerol at 10 to 60 Rs / kg, reducing the costs to a level below/equal to US$ 0,4/l or approx. 20 Rs / l JBD, this could be further reduced if methanol used in processing and one of the cost drivers is recycled and reused (cf. Francis et al. 2005, 20; Kumar 2008). Uncertainty remains about long-term price stability of by-products if an over-supply occurs. 121 Currently trials are done by air lines to use Jatropha and other biofuel blends as jet fuels (cf. Luoma 2009).


different agro-climatic conditions (cf. Achten et al. 2008), e.g. by expert round tables). As soon as this translates into practice, the discourse strategy needs to be broadened to a ref-lective debate, involving at least those groups directly affected (here: contract farmers, (rural) workers) as their support is crucial to achieve better cultivation / processing standards to become effective. Besides, horizontal cooperation with other JBD producing companies be-comes crucial in the case that lobbying is pursued or diagonal cooperation with insurance companies to develop new risk sharing / transferring models.

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Table 38 Option assessment for increased economic viability (Source: Own table).


5.3.3 Management options to conserve biodiversity

Regarding the risks of a long-term allelopathic effect or biodiversity loss caused by Jatropha (block) plantations, it has been found out that both show a degree of uncertainty, while the risk of allelopathic effects is complexity-induced and both are partly ambiguous. As both are still judged as tolerable risks, the primary focus is set on their reduction. This is supported by the fact that risk avoidance − at least for the allelopathic effect − seems to be impossible as it would mean giving up all plantations. Monocultures and toxic components of the plant have been identified as major hazards. However, there are still lots of uncertainties about the scale and nature of their long-term effects. Therefore, risk-informed and precaution-based strate-gies seem appropriate to scientifically gather all available evidence and specify ubiquity and persistence of risks. This could build on an own broad research effort, or at least involving external experts (epistemological discourse) and directly affected groups (farmers), to cap-ture their field experiences. Meanwhile, to reduce risks, the following are prime options within a company’s management scope (see Table 39): mixed plantations (intercropping with TBOs or perennial / annual plants) to avoid monocultures (cf. WBGU 2008, 220; see Table 38), self-restriction to degraded areas with low vegetation (cf. Achten et al. 2008) and a conti-nuous monitoring about effects of the plant, parts of it and its manure on the soil and natural habitat (supported by expert studies).

Table 39 Option assessment to avoid biodiversity loss & allelopathic affects (Source: own table)

Even though one of the options (restriction to degraded lands) results in a less favourable assessment for the efficiency criterion CsE3, which would require its exclusion, it is treated as the only option here, as expanding plantations to agricultural land or land with higher ve-getation would have devastating effects on food security and the emission balance. The fol-lowing argumentation will further underline this aspect.

5.3.4 Management options to avoid intoxication

Related to the allelopathic effects of Jatropha is the risk of intoxication, for they are both in-duced by the toxic nature of the plant, but having different risk targets (natural habitat / soils in the prior, and humans and animals in the latter case). The risk of intoxication shows a sur-prising mix of being simple, in the sense that negative consequences for humans and ani-mals are well-known and no uncertainties remain, but at the same time it is partly ambi-

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guous: depending on its application, the toxicity of the plant is seen as desirable or not. Intox-ication here additionally relates to the use of harmful substances in the cultivation and processing of Jatropha, especially methanol and pesticides. Drawing on the risk strategies for simplicity-induced risks, options of choice are technical standards to deal with the toxic / harmful substances, to set a permissible threshold of concentrations and emissions as well as standards to block exposure, awareness raising and information on toxic / harmful proper-ties of the plant and other chemicals used, as well as marking of chemicals and of planta-tions (e.g. via picture to make information understandable also to illiterate target groups like small children). Avoidance of the risk agent ‘Jatropha’ as such is (again) not treated as an option, but a substitution of chemical inputs by organic inputs or less harmful chemicals should be considered, though it is argued that especially methanol is the most cost-effective input for processing (cf. Gonsalvez 2006, 24), while in the case of chemical agricultural in-puts the organic substitutes tend to cost less. Although these measures belong to the sim-plicity-induced strategy, they require a reflective discourse with target groups directly affected (farmers, local community around plantation) to make them aware about the health risks for humans and animals. This is important as they are in a different relationship with the compa-ny than its ‘agency staff’ and might not respond to an instrumental discourse, and as “[l]imited knowledge of, and involvement in, the risk management process can lead to inap-propriate behaviour in emergency or risk-bearing situations” (Renn 2008a, 51). Thus, the proposed instrumental discourse targeting only agency staff is rated to be insufficient.

Since the issue of toxicity for animals is disputed as being desirable (use of Jatropha as fence) or not (death of livestock) additional measures should be investigated to respond to this situation. This would require a broader consensus finding (reflective) dialog with the af-fected groups to agree upon preventive measures. Similarly, to the plant micro-insurance proposed above, a micro-insurance for livestock could be facilitated by the JBD company broadening the already existing cattle micro-insurance systems, which are still stuck in a pilot stage in the country (cf. MoIB 2009, 88). This measure will only be useful and efficient if the business develops a critical scale (as under the agro-business scenario).


Table 40 Option assessment avoiding intoxication (Source: own table).

5.3.5 Management options for emission management

While the risk of intoxication has been rated as a rather simple problem, the risk of relative emission increase, which has been categorized as tolerable to acceptable, is rather complex-

ity- and uncertainty-induced. Additionally, it has to be recognized that companies can only

influence the extent of emissions generated and not the behavior of the target, as this risk

causes persistent, transboundary effects. Risk strategies will hence focus on the former and

concentrate on gathering information on evidence and ALARP risk reduction and BACT. As

described in the RAP on the emissions from JBD (Table 23), major hazards for an emission

increase during cultivation and processing are a change in land use and a high energy inten-

sive processing of JBD, whereas transportation plays a minor role. Additionally, re-using by-

products (especially husks, oil cake) as energy carriers for the processing and as substitutes

for fossil energy carriers (especially coal and oil) can further reduce emission levels (cf. IFEU

2007, 30, 49, 50). Management options should, therefore, focus on risk reduction by optimiz-

ing technical standards and production processes also aiming at energy self-sufficiency and,

secondly, on risk avoidance of negative net carbon sequestration balances by limiting planta-

tions to degraded areas (see Table 39; cf. WBGU 2008, 220). The option of energy self-

sufficiency by using all by-products runs the risk to create a trade-off with soil improvement

(as the oil cake is needed in large quantities for this purpose and highly suitable for it (cf.

Kaushik et al. 2007, 309)122). A trade-off could also materialize with the provision of access to

energy for rural areas as the oil cake can be gasified and used as a clean kerosene substi-

tute in household applications, which is one of its preferable applications (cf. Chandra et al.

2006, 1; WBGU 2008, 225). Additionally, the positive impact of energy self-sufficiency

122 Yet uncertainty remains about the long-term effects of Jatropa manure on soil and crops.

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strongly depends on the energy carrier substituted (cf. IFEU 2007; WBGU 2008, 222), a fact

that also needs consideration when deciding upon the use of by-products. Moreover, a large

potential seems to exist for a mixed application of by-products from the seeds (husks, oil-

cake) as 70 to 75% of the seed volume remain as by-products (cf. Chandra et al. 2006, 1).123

Furthermore, trade-offs may materialize between a slightly more energy efficient centralized

production124 and a more decentralized one. The latter offers the potential for local employ-

ment generation, better acceptance of the business by farmers and feeding-back by-products

for rural purposes (manure, biogas) (cf. Francis et al. 2005, 19; IFEU 2007, 51). Although

logistical efforts may increase, the volume of goods transported (SVO instead of entire

seeds) decreases. Furthermore, idle oil extraction capacities exist at local level, which could

be redesignated to Jatropha seeds without technical modification (cf. Kaushik et al. 2007,

311; TERI & gtz 2005, 12-3), reducing the need to set up a costly new extraction infrastruc-

ture. Similarly to farming, a buy-back agreement with extractors could be applied here. As a

form of compensation mechanism, parts of the SVO, which could also be used in rural appli-

cations (stoves / generators), could be reducing energy intensive transesterification (cf. IFEU

2007, 49; see Table 38)125 and opening up new commercialization options as long as JBD is

not competitive at petrol stations. Summing up the evidence presented so far, the following

options are summarized inTable 41. The major problem for assessing these options is that

mostly qualitative but only few concise quantitative data − especially for the by-products and

on emission levels of different value chain models − are available (cf. ibid., 50). The energy

demand is not sufficiently quantified either, leaving it up to the individual business risk man-

ager to decide about the most appropriate option. Hence, the risk management strategy

should also include consultation with agency staff and external experts about the best avail-

able knowledge and technologies. Moreover, other stakeholders should be integrated to the

extent that they are involved in the value chain and emission producing activities (e.g. far-

mers using pesticides / chemical fertilizers on the plantation; workers responsible for extrac-

tion process & transport).

123 It is generally calculated that the cake as manure is sold at 1 – 2 Rs / kg (cf. Francis et al. 2005, 20; Gonsalvez 2006, 24; PRAYAS 2006, 56). Quality increase options of manure from husks exist (cf. Sharma et al. 2009). 124 Although the agro-business scenario assumes that centralized value chains will prevail, they have not been established to a large extent yet. Hence, a technological lock-in is still inexistent, leaving room for other options. 125 Processing SVO to JBD makes up for a quarter of total costs (cf. Francis et al. 2005, 20). Additionally, using JBD as transport fuel is not its most eco-efficient application (cf. WBGU 2008, 223).


Table 41 Option assessment for emission management (Source: own table).

Moreover, a broader dialog with the local community and local extraction centres on the pros and cons as well as options of decentralized extraction versus a fully centralized process could help generate the most suitable solution under local conditions.

5.3.6 Management options to foster food security

Similar to the case of emission balances for biofuels, the impact on food security is one of the most debated issues worldwide. It has been argued that this risk is highly complex, partly also uncertainty and ambiguity-induced, but still tolerable. This is due to the political restric-tion to degraded lands in India, its non-edibility (i.e. not directly converting food into fuel) and as it is characterized by a complex causal chain, which could also allow some farmers to profit from a rise in agricultural product prices. The main hazards implied by its large-scale plantation are that competitive pressure may lead to an encroachment of more fertile agricul-tural land, that the toxicity of the plant does not allow for food intercrops (see argumentation on allelopathic effects), that it destroys subsistence agriculture on ‘wasteland’, even more if common lands are used, and that it will compete with food production for resources, e.g. wa-ter. Many of the management options applicable here have been addressed under previous risk issues, like:

− an inclusive land allotment process, which shall avoid that fertile land is given to compa-

nies at the expense of local communities and food production; a self-limitation to de-

graded areas underpinned by transparent and monitored CoC; a compensation for the

loss of subsistence agriculture on common lands via local employment generation, partly

supported by facilitation of access to state subsidies (see Table 37-Table 39);

− the development of efficient cultivation standards, which minimize the input needs to the most efficient level, advertize intercrops as a source of additional income for farmers and

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provide a remedy against monocultures, although long-term effects of toxins in Jatropha on food crops still require more scientific assessment (see Table 38);

− the use of Jatropha by-products to feed them into the agricultural process of the local farming community in order to increase agricultural productivity and to reduce costs and competition with farming inputs (seeTable 41).

The option of risk avoidance, i.e. importing biofuel feedstock instead of growing Jatropha, has been assessed as an unfavourable option (see Table 38). One of the most critical issues belonging to the feared competition for inputs between Jatropha and food crops is the risk of water exploitation, which will be assessed later on. Regarding discourse strategies to deal with the risk of food security, there is no separate approach proposed here, as the option of inclusive wasteland allotment already demands a participative debate, in which aspects of food security can be included.

Another risk, which could also impact on – at least local to regional – food security, is the susceptibility of the plant to and the emergence of diseases and pests due to Jatropha plan-tations with Jatropha being both risk source and target simultaneously. The risk has been rated as mainly complexity- and uncertainty-induced (partly also ambiguous), as well as to-lerable to intolerable. The latter aspect requires that the risk needs to be avoided or at least vulnerabilities or exposure have to be reduced by robustness- and resilience-focused meas-ures, if Jatropha is seen as the risk target, and precaution-based strategies if the plant is treated as the risk agent. This translates into the following risk management options as the main hazards identified are its nature as a host to viruses affecting other plants, monocul-tures and an intensive use of irrigation and fertilizers. The latter, thus, emphasizes again the need for a careful selection of cultivation standards not only to increase productivity and re-duce competition with food inputs, but also to decrease susceptibility to pests and diseases as well as the energy intensity of the cultivation process (see Table 38).126 Other measures, which have been dealt with before, include the avoidance of monocultures by intercropping other plants and TBOs (see Table 38). Jatropha and its parts (e.g. leaves, cake) also offer a self-healing potential as – due to their toxic properties – they can act as bio-pesticides/-insecticides also for other plants (cf. Francis et al. 2005, 19; Kaushik et al. 2007, 310). This potential needs to be fully investigated scientifically and compared to the use of chemical pesticides / insecticides. Furthermore, and as a measure of containment, more research needs to be conducted on crops mostly affected by viruses hosted by the Jatropha plant and vice-versa about diseases affecting Jatropha in order to avoid interference by close cultiva-tion. This could become another risk management option that needs to be assessed (see for all options assessed Table 42).

126 Fertilizer and irrigation account for the biggest share of energy input needs of cultivation (combined approx. 90%), making cultivation the second largest energy consumer in the JBD life cycle after transesterification (cf. Achten et al. 2008, 15).


Table 42 Option assessment for reducing pests and diseases (Source: own table)

This risk furthermore requires a reflective discourse involving, firstly, scientific experts to give advice on new scientific insights as well as bio-pesticide properties. Secondly, the discourse should involve affected target groups (local farming community, Jatropha farmers or workers on corporate farms) to exchange local knowledge about diseases and pests, to decide on most appropriate measures to reduce risks and also to advise on the use of bio-pesticide and to increase their acceptance.

5.3.7 Management options to prevent water overexploitation

The last risk issue analyzed is the excessive water exploitation in a mainly water-stressed environment. This risk has been described as complex, to some extent also characterized by uncertainties and ambiguity as well as being tolerable to intolerable, depending on the re-gional situation and evaluation by the affected community. Hence, risk avoidance seems to be the prefered choice, although this would conflict with the need to realize at least some viable yield by the farmers and the company. Thus, some water input is required at least, and ALARP risk reduction has to be considered.

One of the hampering factors is the already mentioned missing knowledge about the most sustainable input-output ratio, as both too low and too high water inputs have detrimental effects (cf. Achten et al. 2008). Therefore, any management strategy needs to be risk-informed from the the beginning to gather all evidence and knowledge possible, to integrate them in locally adapted cultivation standards and to train farmers and field workers accor-dingly (see Table 38). This must be accomplished by a precautionary approach, as the com-pany can mainly influence the risk agent (water consumption / recycling). Thus, it should seek to reduce the risk to the largest possible extent.

As a preventive approach, the location of plantations should be carefully chosen according to rain conditions and general water availability. This could mean that certain minimum thre-sholds for rain conditions (e.g. not less than 300mm), in dependence with other agro-climatic conditions (e.g. temperature and soil type), are defined to maximize options for stable rain-fed plantations and to reduce the need for additional irrigation. This creates the need for an

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epistemological dialog with experts. Moreover, water harvesting during the rainy season (kharif) and storage are options to minimize the use of ground water.

If rainfall conditions are unstable or do not allow to renounce completely from irrigation, another option is to maximize efficiency of irrigation systems (if done on corporate owned plantations), or otherwise to provide training to farmers and to facilitate the access to re-quired technical infrastructure (e.g. via micro-loans or leasing). The latter needs to be sup-plemented by an assured buy-back agreement and the necessary technical support being in place in order to become effective. In this case, advantages of efficient irrigation, like an in-crease of productivity or the potential for intercropping, and a decrease of fertilizer use and labour intensity for the farmer (cf. Hansel 2007, 111) need to be balanced against its disad-vantages, implying a participative discourse with experts and local communities affected by a potential withdrawal of water resources. To ensure that most efficient techniques are used, companies together with banks and non-profit facilitators could broaden access and also share risks with farmers to gain access to such technologies via micro-loans (cf. ibid., 111) linked to buy-back agreements. This could also help reducing transaction costs compared to normal loans for all parties involved (cf. also Braun et al. 2005, 5) and convince reluctant banks to support the industry.127 Additionally, water pollution and consumption in the processing (mainly transesterification) require attention,128 creating the need for water treat-ment and allowing to reuse water in the processing (cf. FAO 2008, 64). All options mentioned above are summarized and assessed in the following Table 43.

Table 43 Option assessment to minimize water exploitation (Source: own table).

127 A similar model has been successfully tested so far in India by IDEI, a non-profit market facilitator for irrigation technologies for small / marginal farmers, by the ICICI bank and selected and certified drip irrigation suppliers as franchisees and sugar cane companies as assurance via buy-back agreements (cf. Hansel 2007, 110-4). 128 Though water consumption tends to be lower in processing than in cultivation (approx. 80l/t of SVO for tran-sesterification, cf. Francis et al. 2005, 20); while during the author’s field visits water needs were reported to amount to 5-16l/plant*month in initial years (cf. Int. Humana), it offers potential for increasing eco-efficiency.


5.4 Selection of risk management options: sustainable supply chain management

It has been shown in the previous chapter that a considerable amount of management op-tions exists to reduce or even overcome many of the long-term risks mentioned. Instead of presenting those options, which have been assessed as most appropriate in a pick-and-choose manner from the lists above, the analysis will present a more integrated picture, re-cognizing that some risk management options can only fulfill their full risk reduction potential if applied in combination with other options (e.g. access to micro-loans with transparent buy-back agreements and technical assistance, cultivation standards with technical training). The integrated picture builds on the concept of sustainable supply chain management (SSCM), defining supply chains as

“a set of three or more entities (organizations or individuals) directly involved in the up-stream and downstream flows of products, services, finances, and/or information from a source to a customer” (Mentzer et al. 2001, 4).

The challenge for the individual company is to produce large volumes of a low-cost homoge-neous product (JBD) at a competitive, nationally pre-determined price by a range of small to medium size producers or few own plantations at the ‘start’ of the value chain and a limited number of publicly controlled purchasing centres and oil companies for JBD at its ‘end’. This implies that input prices, especially those of seeds, need to remain at a cost-effective level for both the company and the farmers. Hence, companies must seek solutions to agree with farmers on competitive buy-back prices by promoting other options that provide additional value and benefit for farmers. Looking at similar challenges, i.e. from the creation of a sus-tainable cotton value chain (based on risks described in Seuring 2007, 46-8; Seuring & Goldbach 2006), the proposed risk management strategy includes the creation of a strategic network with a company in a focal129 position to control the value-creation process (cf. Schal-tegger et al. 2003, 133). Similarly as for sustainable cotton, a market has neither been fully developed on the supply nor on the demand side, as quality seeds are still lacking (and if available reused for further plantation) and JBD blend is not available for the time being. Therefore, currently purely price oriented coordination mechanisms do not seem to work out, and other mechanisms, like hierarchy-induced command-and-control or cooperation-induced negotiation mechanisms (cf. Seuring 2007, 50), must be introduced. The basic features of the proposed SSCM are:

− enhancing trust and participation by cooperation and commitment of the company also reflected in its transparently communicated and regularly monitored CoC; this includes –as demanded by Mentzer et al. (cf. 2001, 8-10) – that not only information but also risks and rewards are shared by the involved actors, that a brought cooperation is thought from planning to monitoring and that cooperation is aiming at a long-term relationship;

− maximizing eco- and socio-efficiency along the value creation process by inclusive risk governance and management;

− compensating a competitive buy-back price by service extention (e.g. micro-insurance / loan facilitation), which renders additional benefit to the farmers and local communities;

129 Following the definition of Seuring (cf. 2007, 4) the focal company structures and mainly organizes the value chain. It is responsible for the product development, distribution and supplier selection.

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− maximizing the use of by-products: for processing, as an agricultural input or commercia-lization as rural energy, to reduce costs and emissions and improve environmental condi-tions;

− seeking cooperation with and supporting actors that are not directly linked to the value chain, especially local community representatives and NGOs acknowledging their impor-tant role for problem-solving, as many issues to tackle require support of the civil society (e.g. avoiding land conflicts), their educative role supporting awareness raising (e.g. about toxicity of Jatropha) as trusted bodies within the community, and their service func-tion, e.g. by catalyzing local decision-processes (cf. also Hopkinson 2001, 3-4, 7).

The entire supply chain with risk management options and coordination mechanisms rec-ommended is displayed in Figure 8, including options that have been positively assessed, especially those that fulfill multiple risk reduction purposes and that can be applied widely independent from farming models (corporate or contract farming).130

Figure 8 SSCM including coordination mechanisms and risk management option (Source: own figure).

Obviously, implementing a SSCM via a strategic network is not an easy task, requiring lots of trust and ownership building with the local community and other partners as well as coordina-tion efforts in the beginning. However, it is seen worthwhile pursuing as it allows for tackling many foreseeable risks within the large-scale production of JBD and as it might even just enable it. It can also create a stable business environment in the medium-term.

130 For options selected, the last row has been marked dark grey in the option assessment tables above.


5.5 Interim conclusion

For the case of large-scale JBD production, options have been selected based on their as-sessment against the pre-weighted criteria following a simplified approach of the ADMP. Evaluation of criteria has taken place following the ‘benevolent dictator’ method (cf. Renn & Schweizer et al. 2007, 105) based on findings from previous stages. It has been helpful to further operationalize the IRGC assessment criterion ‘sustainability’ using criteria for sustain-able energy to deal with such a complex issue, though this resulted in some degree of re-dundancy between assessment criteria for sustainable energy and analyzed risks. The ADMP is a helpful but also limited tool as it needs to reduce assessments to the assumption of at least largely homogeneous preferences (cf. ibid., 106). However, if applied locally, crite-ria evaluation would first of all need to follow a more participative procedure, and it is rec-ommended, as most of the risks have been identified of being uncertain and/or ambiguous, to opt for a reflective or participatory consensus-finding on management options, involving at least directly affected groups (mostly local community representatives (e.g. PRIs and far-mers) as well as experts from science and governmental agencies according to the issue at stake. It will be important to adapt meeting and deliberation procedures to locally accepted forms (cf. ibid., 111) and in accordance with the aim of the discourse, e.g. if it aims at inform-ing farmers and creating awareness ‘kisan melas’ (farmers’ fairs) could be a suitable option. Participation of stakeholders, foremost affected groups, would enhance the acceptability of the risk management strategy and could also increase support for it (cf. ibid., 107). In some cases, participation is already the preferred management option and not only a means to agree on them.

Another lesson learned relates to the generic risk management strategies: they can hardly be treated as stand-alone strategies due to the multi-facetted nature of risks, which, in some cases, include aspects of complexity, uncertainty and ambiguity. Therefore, risk manage-ment options drew from several and in few cases even from ‘lower’ risk classes of the risk management escalator. Hence, it is questionable if strategies based on risk classes should follow a sequential or rather an additive logic, supporting first reconsideration by the IRGC (cf. Renn & Jäger 2008, 122). On the other hand, the thesis of Löfstedt & Asselt (cf. 2008, 83) that all complex and/or certain risks will ‘automatically’ require a deliberative discourse has not been proven in this analysis as discourse types on ‘lower’ steps of the escalator have been judged as appropriate.

Risk management options presented here can never be comprehensive as they are a mov-ing target as soon as new knowledge is generated, surrounding conditions change and new risks emerge due to a continuously changing economic, legal, physical etc. environment (cf. Tchankova 2002, 295-6). Therefore, not only a continuous search for and reassessing of risks (cf. ibid., 292-3) but consequently also an assessment of options needs to take place over time. One also needs to be aware of the limitations of risk management. Firstly, if the specific case of corporate risk management is taken into account, it became clear that it can-not always draw from the full spectrum of risk management options due to the limited influ-ence of the business sector on either risk agents or targets or both. Secondly, the role of discourse strategies needs careful attention. Though the present analysis shows the impor-tance of discourses, the need for business to “take early action to secure the ‘power of inter-

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pretation” is also underlined in literature (Schaltegger et al. 2003, 49) similarly as the signific-ance of discourses is stressed by the IRGC

“to assist stakeholders in understanding the rationale of risk assessment results and risk management decisions, and to help them arrive at a balanced judgement that reflects the factual evidence” (Renn 2008a, 50; cf. also Renn & Walker 2008, 333);

the argumentation of Tait (2008, 140) is supported here:

„When risk assessments are strongly influenced by advocacy groups that have a principal, ideological opposition to a particular technology, no amount of evidence, regardless of its scientific quality, will lead to a change of opinion or risk-related behavioural responses.”

To conclude, the next chapter will summarize main findings on the issue at stake, provide a brief feedback on the IRGC-RGF as the research guideline applied in the present thesis, and give insights into demands for future research.

CONCLUSION 141

6 CONCLUSION

The topic of this master thesis has been ‘Sustainable energy: Risks and opportunities of biomass for bio fuel - The case of Jatropha cultivation in India’. The research has been fo-cused on the (emerging) risks linked to large-scale Jatropha cultivation for bio fuels in India in view of economic, ecological as well as social aspects and on what has already been un-dertaken and what can still be done from the point of view of the business sector to enhance the sustainability of JBD. For this purpose, the IRGC-RGF has been applied to identify, as-sess and evaluate risks related to the issue at stake and generate management options. Hence, this chapter starts with a brief feedback on this framework.

The objective of the IRGC while developing their Risk Governance framework was to

“offer both a comprehensive means of integrating risk identification, assessment, man-agement, and communication, and a tool that can compensate the absence of (or weak-nesses in) risk governance structures and processes“ (Renn 2008c, 201; see also chapter 2.3).

Following the analysis of the case of Jatropha business for biofuels in India, one of the major strengths of the IRGC-RGF is its inclusiveness regarding stakeholder perspectives, participa-tion and communication, which is a prerequisite from the point of view of sustainable busi-ness management to maintain the “social legitimacy of the business” (Schaltegger et al. 2003, 16; cf. also Schaltegger & Burritt 2005, 204-5; see also chapter 5.2). It also assists in gaining further necessary insights into the different stakes and strengths of stakeholders as well as into perception and knowledge gaps between laypersons and experts (see chapters 4.1 and 4.2), which require recognition and action by corporate risk managers, for sciencitific research alone could not reveal such a broad knowledge. A second important and helpful feature of the IRGC-RGF is its distinction between different risk-classes (e.g. complex vs. simple), which is reflected in the risk management and communication options by creating a foreseeable and manageable set of generic risk management and communication strategies supporting risk managers to deal with the various challenges. As chapter 5 demonstrated, it is also suitable as a tool for corporate risk managers. Yet risks identified did seldom pertain to only one of these risk classes (see Figure 7), but comprised aspects of several classes. Therefore, a single attribution to just one of the generic risk management strategies is ham-pered. Additionally, classifying risks or even more evaluating them as tolerable or inaccepta-ble is a highly challenging task, and the evaluation will certainly vary in the perspectives of different stakeholder groups and with the dissemination of new knowledge over time. There-fore, it is specifically questionable whether the task of classifying risks as ambiguous can only be done by scientific risk assessors as implied in the IRGC-RGF (cf. IRGC 2005, 30-1). In this analysis, cases of ambiguity derived from the pre-/ concern assessment were taken into account in the RAPs.

Furthermore, the iterative and interdisciplinary structure of the RGF allows for a learning process within the procedure. However, at the same time this can be a pitfall for the system, as risk managers / assessors with limited (time) resources might get confused within the dif-

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ferent stages and sometimes differentiation between stages and also terms applied need further clarification and practical guidance. The experience from the expert interviews was that risks were largely associated with only negative consequences and the distinction be-tween risks and hazards was in some cases not easily understood or not used consistently by the interviewees. There is also room to increase consistency at some stages: At the be-ginning, the term ‘risk’ is defined by comprising both positive and negative consequences (cf. IRGC 2005, 12, 19; see chapter 1.2). But, for example, the inherent logic of the traffic light model (see Figure 2) demonstrates that the RGF focuses only on negative consequences (i.e. in case of a non-ambigious positive consequence it would be even more desirable the larger its impact and probability). Positive consequences run the risk of taking a back seat in the RGF due to the (in principle important) goal of the IRGC-RGF to avoid negative conse-quences from being downplayed or ignored (cf. Renn & Walker 2008, 340). Moreover, a more selective approach regarding concrete tools for each of its stages from the abundant range of tools at which the IRGC-RGF hints at - without being excessively strict -, would in-crease its feasibility and comprehensibility. Especially as its declared objective is to serve risk managers in their daily work, though it is not deemed to serve as a risk governance ma-nual (cf. IRGC 2005; see chapter 2.3).

Generally, two things became obvious. Risk governance is a continuous endeauvour requir-ing an interdisciplinary open-minded but structured process as risks are moving targets. Risks change over time along with the changes of knowledge, of perceptions and of system influencing variables (e.g. the upcoming national policy and its implementation). Moreover and linked to the first aspect, a demand for further investigation is perceived before Jatropha is increasingly applied on large-scale by business actors to constantly reduce the number of risks that have not been indentified yet. For example, more information is needed on its eu-trophication and acidification potential, on its long-term impacts on health as well as on inter-crops, and on its impact on different rural social groups. The latter have been treated as a rather homogenous group, but e.g. gender related risks require a deeper analysis, an aspect that also might need to gain more attention in a risk governance framework.

Concluding, the IRGC-RGF is seen as a valuable tool for the case of large-scale bioenergy generation from Jatropha in India, in particular as many of the inherent risks are complexity- and/or uncertainty-induced, in some cases also highly ambiguous. The risks imply trans-boundary effects, which have the potential to cause more than just physical harm and involve many different decision-making levels and actors (from the individual farmer to the GoI). The strength of the IRGC-RGF in this particular case is that (in combination with a QSA and SSC, see chapters 2.4 and 4.2) it allows for a prospective risk governance, as the risk agent (here: large-scale JBD production) and therefore its risks and hazards have not fully matured. It also renders comprehensive risk identification possible. Firstly, and more generally speaking, it allows to look at different risk spheres, ranging from environmental to social and economic risks, enabling to develop a more sustainability oriented risk management. Secondly, due to the involvement of a broad range of stakeholders in various stages, and, last but not least, due to its iterative process, it reduces the possibility to overlook risk issues. Of course and following Rosa (cf. 2008, 102), this is only possible to the extent risks are known and it is also known what is not known.

CONCLUSION 143

As regards the main research questions, it has been found that Jatropha as such has the potential to offer a sustainable solution to a growing energy demand, although expectations should be kept low. It is not a ‘wonder plant’, as its large-scale propagation is closely linked to a series of complex risks, many uncertainties about its long-term effects and some ambi-guous impacts. Hence, it should be rather treated as one of several options of an energy mix, and measures need to be developed to ensure its sustainability potential.

It has also been shown that especially companies can and must contribute to revealing many of the promising features of the plant. For this purpose the outline of a SSCM has been de-veloped (see chapter 5.4). By applying the SSCM, it is assumed that the plant’s promising features, like the value of its by-products, its potential to generate surplus local employment, or its comparibly low life cycle emission level, can be fully exploited as long as some key is-sues are taken into account. These key issues include avoiding to grow Jatropha on crop land, increasing the energy-efficiency of the process (without expecting that the plant could absorb more CO2 than it would release) and even more crucially, finding a competitive input-output ratio, which at the same time respects the demands of a sustainable development on degraded lands. The fact that the business is still in a nascent stage not only in India but worldwide might turn out to be an asset in this case, as there is still room and demand to develop appropriate business models. Companies should not only look at the agronomics of the business, but be aware of some risks bearing the potential to create social mobilization and of the demands and concerns of its stakeholders, which have the potential to withdraw ‘social legitimacy’ from the business, as has been explained in this thesis (see chapter 5.2). Hence, applying a sustainability oriented risk governance framework does only support the business sector to reduce risks, but increases those benefits that renewable energy sources like Jatropha offer and helps developing a business case for sustainable energy.

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(2007c): “India to emerge as largest producer of sugar in world”, January 5, 2007.

(2007d): “President’s address at the inauguration of the inter-ministerial summit in New Delhi”, January 15, 2007.

(2007e): “Use jatropha as bio-diesel”, January 27, 2007.

(2007f): “Oil & gas conservation fortnight observed at BRPL”, February 11, 2007.

(2007g): “Government support in development of biodiesel plants spurs growth of U.S. glycerin market”, February 15, 2007.

(2007h): “NREGA scheme held at Dhemaji”, February 22, 2007.

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(2007j): “Opp critical of Agricultural Department Performance”, March 27, 2007.

(2007k): “IOC to venture into biofuel business”, March 28, 2007.

(2007l): “President addresses joint call by heads of states at 14th SAARC Summit”, April 3, 2007.

(2007m): “Farmers cautioned about jatropha cultivation”, April 17, 2007.

(2007n): “Jatropha cultivation in Biswanath Subdivision”, May 11, 2007.

(2007o): “Jatropha plantation”, May 28, 2007.

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150 JANA LATSCHAN

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(2008f): “UGC Workshop on bio-fuel held at ADP college”, September 1, 2008.

(2008g): “Energy security and alternative sources”, September 3, 2008.

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India Today (IT) (all taken from LexisNexis):

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International Crops Research Institute for the Semi-Arid Tropics (ICRISAT)

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International Risk Governance Council (IRGC)

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Zah, R.; Böni, H.; Gauch, M.; Hischier, R.; Lehmann, M. & Wäger, P. (2007): Ökobilanz von Energieprodukten: Ökologische Bewertung von Biotreibstoffen. Studie im Auftrag des Bundesamtes für Energie, des Bundesamtes für Umwelt und des Bundesamtes für Landwirtschaft. Bern: EMPA et al..

Laws & Regulation:

European Parliament (EP) (2009): “European Parliament legislative resolution of 17 Decem-ber 2008 on the proposal for a directive of the European Parliament and of the Coun-cil on the promotion of the use of energy from renewable sources (COM(2008)0019 – C6-0046/2008 – 2008/0016(COD)”, Texts adopted at the sitting of Wednesday 17 December 2008, P6_TA-PROV(2008)12-17, Provisional Edition, PE 417.801, pp. 1-75. http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+TA+20081217+SIT+DOC+WORD+V0//EN&language=EN [access: 10.3.09].

Government of Chhattisgarh (GoC) (2006): The Lease (Government land for Ratanjot/Karanj plantation and bio-diesel based processing unit) rules 2006. 1.9.2006. Raipur: GoC.

Government of Rajasthan (GoR) (2007): Notification. Rajasthan Land Revenue (Allotment of waste land for bio-fuel plantation and bio-fuel based Industrial and processing unit) Rules 2007. 7.5.07. Jaipur: GoR.

Ministry of Petroleum & Natural Gas (MoPNG), GoI (2005): Bio-diesel Purchase Policy. Oc-tober 9, 2005. http://petroleum.nic.in/Bio-Diesel.pdf [access: 10.10.08].

Websites:

[Last access of all websites: 16.5.09]

Union Government

http://planningcommission.nic.int/ - Website Planning Commission, Government of India.

http://dolr.nic.in/fwastecatg.htm - Wasteland Atlas of India developed by the MoRD.

http://lab.cgpl.iisc.ernet.in/Atlas/Default.aspx - Biomass Ressource Atlas of India by MNRE.

http://panchayat.gov.in/ - Website of the Ministry of Panchayati Raj.

http://www.nabard.org/ - Website of the National Bank for Agriculture and Rural Develop-ment.

http://www.novodboard.com/ - Website of the National Oilseeds and Vegetable Oils Devel-opment Board (NOVOD).

160 JANA LATSCHAN

State Governments

http://www.cbdacg.com/ - Website Chhattisgarh Biofuel Development Authority.

http://www.biofuelraj.gov.in/ - Website of the Biofuel Authority of Rajasthan.

http://ubfb.org/ - Website of the Uttarakhand Biodiesel Board.

News & Media

http://indiatoday.intoday.in/ - Website Weekly Magazine India Today.

http://www.hindustantimes.com/ - Website Hindustan Times, daily newspaper.

http://businesstoday.intoday.in/ - Website fortnightly magazine Business Today India.

http://www.livemint.com/Lounge.aspx - MINT - daily business magazine (except Sundays).

Companies

http://bharatpetroleum.in/EnergisingEnvironment/HSE_Jatropa.aspx?id=3 - Bharat Petroleum Corp. Ltd.’s website on its Jatropha commitment.

http://www.d1bpfuelcrops.com/ - D1-BP Fuel Crops Ltd. website (more information is pro-vided on D1’s website http://www.d1plc.com/agronomyFuel.php).

http://www.d1plc.com/globalIndia.php & http://www.d1plc.com/news.php?article=29 - few information on D1 Mohan Bio Oils Ltd., mostly active in Tamil Nadu, can be found on these websites.

http://www.d1plc.com/news.php?article=17 – information by D1 on the D1 JV with the Wil-liamson Magor Group to plant Jatropha in the North East of India.

http://www.growdiesel.com/ - Website of Growdiesel, a SVO processing company.

http://www.gujaratoleochem.com/about%20us.htm – Website of Gujarat Oleo Chem Ltd. dedicated exclusively to the production of biodiesel in India.

http://www.chbl.co.in/ - Website (under construction) of the JV between Hindustan Petroleum Corporation Ltd. and Chhattisgarh Renewable Energy Development Agency.

http://www.ikfgreenfuel.com/Who_we_are.php - Website of IKF Green Fuel Ltd. India and overview on its Jatropha projects mainly in Madhya Pradesh, Andhra Pradesh.

http://www.iocl.com/ - Website of the Indian Oil Corporation.

http://www.medorsbiotech.com/ - Website of Medors Biotech Pvt. Ltd., one of the most ex-tensive company websites on biodiesel.

http://www.missionbiofuels.com/MissionBioFuelIndia.php - Website of Mission Biofuel India Pvt. Ltd., a subsidiary of Mission NewEnergy Ltd.

http://www.nandan.biz/ - Website of NANDAN Biomatrix, which apart from biofuels like JBD also focuses on medicinal plant extracts.

LITERATURE 161

http://www.naturol-bio.com/ - Website of Naturol Bioenergy Ltd., mainly active in Andhra Pradesh for the cultivation of Jatropha.

http://www.rellife.com/biofuels.html - Website of the Reliance subsidiary, Reliance Biofuels Pvt. Ltd., which produces biodiesel from Jatropha and also other biofuels.

http://www.sol.net.in/ - Website of Southern Online Biotechnologies Ltd., active in biodiesel production since 2005.

http://www.tinnagroup.com/bdd.html - Information on Tinna Oils & Chemicals Ltd.’s activities in the field of JBD.

http://www.treeoilsindia.com/ - Website of Tree Oils India Ltd., focusing on biodiesel from Jatropha and Pongamia, mainly active in Andhra Pradesh.

http://www.bdai.org.in/ - Website of the Biodiesel Association of India, a lobby organization for the Indian biodiesel sector.

http://www.biodzl.com/india - overview on further biodiesel projects in India.

Research Organizations:

http://www.csir.res.in/ - Website of the Council of Scientific and Industrial Research.

http://www.csmcri.org/index.html - Webiste of the Central Salt & Marine Chemical Research Institute India.

http://www.energybiosciencesinstitute.org/ - Website of the University of Berkeley’s and BP’s EBI.

http://www.iari.res.in/ - Website of the Indian Agriculture Research Institute.

http://www.icrisat.org/ - Website of the International Crops Research Institute for the Semi-Arid Tropics.

http://www.pcra-biofuels.org/ - Website of the Petroleum Conservation Research Associa-tion’s National Biofuel Centre.

http://www.teriin.org/ - Website of the The Energy and Resources Institute.

http://www.tnau.ac.in/tech/index.html - Website of the Tamil Nadu Agricultural University’s research on biofuel crops like Jatropha and Sweet Sorghum.

http://www.ecoinvent.ch/ - Website of the ecoinvent Centre, offering access to different LCAs.

NGOs:

http://www.cecoedecon.org/ - Website of the Centre for Community Economics and Devel-opment Consultants Society.

http://www.cseindia.org/ - Website of the Center for Science and the Environment.

http://www.ddsindia.com/ - Website of the Deccan Development Society.

162 JANA LATSCHAN

http://www.grain.org/front/ - Website of the international NGO GRAIN, working also in India on the issue of biofuels.

http://www.kalpavriksh.org/ - Website of the Kalpavriksh Environment Action Group.

http://www.nariphaltan.org/nari/ - Website of the Nimbkar Agricultural Research Institute, an NGO doing research on biofuels.

http://www.navdanya.org/ - Website of NAVDANYA, NGO headed by Vandana Shiva.

http://www.spwdindia.org - Website of the Society for Promotion of Wastelands Develop-ment.

Sustainable Biofuel Certification Schemes:

http://www.rspo.org - Roundtable on Sustainable Palm Oil.

http://www.responsiblesoy.org/ - Roundtable on Responsible Soy Association.

http://www.bettersugarcane.org - Better Sugarcane Initiative.

http://cgse.epfl.ch/page65660.html - Website of the Roundtable on Sustainable Biofuels hosted by the École Polytechnique Fédérale de Lausanne.

ANNEXES 163

ANNEXES

Annex 1 List of interviews in India carried out in January 2009

Name Function Organisation Quoted as Int.

Ashish Aggar-wal

Area Convenor Forestry & Biodiversity, The Energy and Resources Insti-tute (TERI)

TERI 1

Alka Awasthi Dy. Director, Natural Resource Management

CECOEDECON, Jaipur CECOEDECON

Somnath Bhat-tacharjee

Vice President WINROCK International India, Gurgaon

Winrock

Shalini Bhutani National Coordinator GRAIN GRAIN

Samiran Das CEO D1-BP Biofuel Crops India Pvt. Ltd., Gurgaon

D1-BP Biofuel

Dr. Yogesh Gokhale

Associate Fellow Forestry & Biodiversity, The Energy and Resources Insti-tute (TERI)

TERI 1

C. Joglekar Former staff member; responsible for PRAYAS’ Jatropha report

PRAYAS PRAYAS

Suhas Kad-laskar

Director Corporate Af-fairs

Mercedes Benz India Pri-vate Ltd., Chakan / Pune.

Mercedes

Kanchi Kohli Team Member Kalpavriksh Environment Action Group

KEAG

Dr. Nutan Kau-shik

Fellow and Area Conve-nor

Plant Biotechnology

Environmental and Industrial Biotechnology Division, TE-RI

TERI 2

Prof. Ashwani Kumar

Professor of Botany University of Rajasthan, Jaipur

UoR

164 JANA LATSCHAN

Dr. Suman Kumar

Manager National Bank for Agri-culture and Rural Devel-opment, Mumbai

NABARD

Viren Lobo Executive Director Society for Promotion of Wastelands Develop-ment (SPWD), New Del-hi

SPWD

Dr. Meenakshi Munshi

Department of Biotechnology, Joint Director

Ministry of Science and Technology, GoI, New Delhi

DBT

N.N. N.N. Ministry of Agriculture - Indian Agricultural Re-search Institute, New Delhi

IARI 1

Dr. Vijendra Pratap Singh Shekhawat

Department of Biotechnology / former staff of PARAS

Mahatma Gandhi Insti-tute of Applied Sciences, Jaipur

MGIAS

Dr. M. S. Punia Executive Director National Oilseeds and Vegetable Oils Devel-opment Board (NO-VOD), Gurgaon

NOVOD

Anil K. Rajvan-shi

Director Nimbkar Agricultural Research Institute, Phal-tan

NARI

Dr. Chalapathy Reddy

Senior Scientist Mission Biofuel, Mumbai Mission Biofuel

Anumita Roy Chowdhury

Associate Director, Research and Advocacy

Centre for Science and Environment, New Delhi

CSE

Atul Saxena CEO GROWDIESEL Consor-tium

Growdiesel

Dr. D. K. Sharma

Senior Scientist Division of Environmen-tal Sciences, Ministry of Agriculture - IARI, New Delhi

IARI 2

ANNEXES 165

H. L. Sharma Director Biofuels Ministry of New and Re-newable Energy, GoI, New Delhi

MNRE

R.C. Sharma CEO Medors Biotech Pvt. Ltd. Medors

Dr. Venkatesh Tagat

Chief General Manager, National Bank for Agri-culture and Rural Devel-opment, Mumbai

NABARD

Prateek Tiwari State Head Agribusiness Division ITC Ltd. ITC

Dr. D. N. Tiwari President SIET and UTTHAN NGO, former Chairman of the National Commission on Biofuels, Member of the Chhattisgarh Bio-fuel Board

UTTHAN Utthan

Om Prakash Yogi

Project Leader, Green Action Viratnagar

Humana People to India, Vihar

Humana

Annex 2 List of organizations who answered a questionnaire

Name Function Organisation

N.N. N.N. Southern Online Biotechnolo-gies Ltd.

Dr. George Francis Managing Director Live Energies

Dr. D.N. Tewari President SIET and UT-THAN NGO, former Chairman of the National Commission on Biofuels, Member of the Chhattis-garh Biofuel Board

Utthan Centre for Sustainable Development and Poverty Al-leviation

Source: Own table. N.N. = the interviewee wanted to remain anonymous.

166 JANA LATSCHAN

Annex 3 World bioethanol and biodiesel production 2007

Source: FAO 2008a, 15.

Annex 4 Development of the OPEC basket price

Source: OPEC http://www.opec.org/home/basket.aspx [access: 26.4.09].

ANNEXES 167

Annex 5 Examples of state policies for the promotion of TBOs & biodiesel

State Measures Dominating actors & structures

Andhra Pradesh

− From 1.1.2003 5% blend with biofuel for diesel mandatory & Andhra Pradesh State Road Transport Corporation must run 10 % of fleet on 5 % blended biodiesel by 2007

− Aim: 40,500 ha of biodiesel plantations in 13 districts of the state (2008: 16.200h ha achieved), make productive use / rehabilitate degraded land; create rural income

− Focus: Simaruba & Pongamia due to less water needs than Jatropha, but not exclu-sively

− Promotion of biodiesel plantations on specified private land and forest land,

− Emphasis on linkages with private entrepreneurs.

− Organisational structure:

• Rain Shadow Areas Development Department (RADD): policy-making, monitoring and promoting entrepreneurship,

• Department for Panchayati Raj and Rural Development: implementing programme & promoting private land plantations;

• State Level Task Force Committee (SLTFC): monitoring of programme

− Incentives: Financial support via Andhra Pradesh Rural Employment Guarantee Scheme (20 % of funds for plantation earmarked), support especially for small / mar-ginal farmers; funds are also given for installing drip irrigation

− Incentives: Seedlings provided to farmers by State Forest Department (SFD); SFD promotes also plantations on forest lands via JFM, 2008: 20.000ha planted with NA-BARD & World Bank & National Afforestation Scheme support; aim: PPP with private

Actors: Private companies & state agencies; Structure: Large-scale plantations aimed at, contract farm-ing with buy-back-agreements;

minimum purchase price for seeds and state subsidies

168 JANA LATSCHAN

company under guaranteed buy-back agreement; 90% subsidy for irrigation system; VAT for biodiesel reduced to 4%

− Private companies have to register with SLTFC; RADD allots specific areas to them & companies receive full NREGS support for the small and marginal farmers under buy-back agreements with the company. Duty of the private companies: ensure 90 % sur-vival after 3rd year; procure seeds at the market price, or at least at minimum support price set by RADD (2008: 6 Rs/kg Jatropha); set up local expelling and transesterifica-tion units.

• Example: NATUROL Bioenergy allotted with 120,000 ha for Jatropha cultivation in 2006;

Source: Own compilation based on: Adholeya & Dadhich 2008, 21; Altenburg et al. 2009, 7, 62-5; Chandel et al. 2007, 371; Francis et al. 2005, 17; Gonsal-vez 2006,9, 30-1; Negi et al. 2006, 22; PRAYAS 2006, 7; TERI & gtz 2005, 51, 53, 66; Shiva 2008, 8

ANNEXES 169

State Measures (continued) Dominating actors & structures

Chhattisgarh

Since 2005

− By end of 2007, 154,000 ha of Jatropha plantations raised out of 1 Mio ha aimed at until 2012 – aim is to become bio-fuel self-reliant state by 2015, fur-ther aims: Rural development; reduction of GHG emissions

− Focus on Jatropha

− Multiple land approach: forest land, revenue & common land, private land

− Organisational structure:

• Creation of special board: Chhattisgarh Biofuel Development Authority (CBDA) in 2005 for coordination;

• district task forces with District Collector installed for land identification;

• Forest land plantations guided by SFD, done by local workers paid by NREGS. SFD for plantation on forest lands

− Incentives: government nurseries for private / common / revenue land planta-tions; Supports from central funds from MoRD (for nurseries) & NREGS for wage labour & state government funds; For Private farmers 500 saplings for free; > 500 seedlings subsidized price of Rs. 0.5 and limited to 5,000 saplings; On common lands: After 3 years, people can collect & sell seeds to state at min-imum support price of 5.5 Rs. / kg (2009), or private traders at any price. The same applies for JFMCs on forest land.

− Incentives: companies setting up processing plants receive tax exemptions, electricity duty exemptions, interest subsidies, and infrastructure cost subsidies, etc.; state also set up small oil extraction units; Revenue / private land: buyback agreements with private companies possible. Private companies do not have to

Actors: Multiple actors depending on val-ue chain Structure: Multiple types; free-market approach, with strong direction towards large-scale plantations;

Minimum purchase price of seeds and subsidies in form of limited free seeds & NREGS support

170 JANA LATSCHAN

register with CBDA for licenses, but need to coordinate with District Collector.

− Leasing of block plantations by state limited to public sector / Indian companies via joint venture with CBDA. Land allotment process involves broad range of state actors (no single-window clearance). Land allotment limited to 200 ha (ex-ceptions decided on case-by-case basis) for 10 years with possible renewable of 20 years; annually increasing lease rent from 100 Rs / ha 1st yr to 1,000 Rs / ha 8th yr onwards. Strong interests to open up leasing also to private compa-nies.

− Example: Since 2008 cooperation between Hindustan Petroleum Corp. Ltd.’s subsidiary CREDA - HPCL Biofuels Ltd. and Chhattisgarh State Renewable Energy Development Agency to plant Jatropha, 3,000 ha planted by mid 2008

Source: Own compilation based on Adholeya & Dadhich 2008, 21, 171-4; Altenburg et al. 2009, 60-2, 70; Anonymus 2006; GoC 2006; Negi et al. 2006, 20, 23; Shiva 2008, 24 et sqq.; Shukla 2006; UNI 2008a; Website of CBDA http://www.cbdacg.com/ & http://www.cbdacg.com/aboutus.htm [access on: 15.3.2009].

ANNEXES 171


Karnataka

− From 1.1.2003 5% blend with biofuel for diesel mandatory

− Aim: Cooperative biodiesel system of small farmers; Pongamia for afforestation; economic development & employment

− Focus on Pongomia due to well-established market for seeds (leather / painting industry) & to existing oil expelling infrastructure

− State Agricultural department main driver of new biofuel policy (not in place in 2008), still in pilot stage, aim: cooperative for the whole state on communal land; integrative approach focusing on inclusion of civil society; core aspects fo-reseen:

• Biofuel Development Authority as coordinating body

• NREGS to fund plantations;

• Exempt biodiesel from VAT.

• multi-species approach (farmer’s choice according to soil & climatic) & pro-motion of biofuels and SVO

• no monoculture plantations.

Actors: State & cooperatives Structure: Mul-ti-sourcing approach with strong role of far-mers, no monoculture block plantation

Source: Own compilation based on Altenburg et al. 2009, 7, 65-6; Chandel et al. 2007, 371; Francis et al. 2005, 17; Shiva 2008, 8

172 JANA LATSCHAN


Rajasthan

Bio Fuel Mission constituted in 2005-06

− Focus: Jatropha, but also other TBO

− Land allotment: 70% to community organizations like SHGs and Gram Panchayats; 30% to private and public companies, decision about land allotment by state representatives and partially district collector; wasteland specified for 11 districts not by type of wasteland

− Coordination: Rajasthan biofuel authority

− Incentives for companies:

• Rajasthan Land Revenue Rules, 2007: 1,000 ha (with an extension to up to 5,000 ha possible) of village common lands can be trans-ferred for 20 years from the village community to biofuel industry, especially for Jatropha

• private company 10 years tax holiday, no payment of cross-state-transportation taxes,

• Land allotment especially in areas with good rainfall & water given in priority to Jatropha plantations via district water authorities.

− Duties of companies:

• establish processing / transesterification units & nurseries, R&D activities,

• employment generation: min. 50% unskilled labour from local areas

• payment of registration fees; timely plantation process within 3

Actors: State & companies & community or-ganisations Structures: Mixed approach: community plantations but also focus on large-scale corporate plantations; low incen-tives

ANNEXES 173

years

• compulsory to adopt micro irrigation management system

− Incentives for farmers: purchase Jatropha at a minimum support price of Rs.7.00 / kg set by Biofuel Authority

− Example companies: Latest data available from a monthly progress report August 2008 showed that no major land allotment to companies has taken place

Source: Own compilation based on: GoR 2007; Int. CECOEDECON; Navdanya 2007; PCB 2008; Shiva 2008, 24et sqq.; Websites of the Biofuel Authority of Rajasthan: http://www.biofuelraj.gov.in/, http://www.biofuelraj.gov.in/aboutus.htm & http://www.biofuelraj.gov.in/Revenue-Rules-Bio-fuel.pdf [accesss on 5.4.09].

174 JANA LATSCHAN


Uttarakhand

(until 2006: Utta-ranchal) Since 2004 biodiesel pol-icy

− Land focus on degraded land of Van Panchayats and forests, with strong focus on forests; expected: mainly small family plantations of 1 – 2 ha;

− Aim: Employment generation & regeneration of degraded forest areas & cultivate Jatropha on 200,000 ha of village forest land until 2012 (5% in place by 2008)

− Organisational structure: State Government has PPP with one single company (Uttarakhand Biofuels Limited - UBL), includes also Van Pan-chayats! PPP is named Uttarakhand Biodiesel Board;

• UBB, Van Panchayats and JFMCs identify land for Jatropha cultiva-tion & select beneficiaries for 1-2 ha of the plantations; seedlings provided for free; seeds are treated as forest produce. Clear focus on Jatropha.

• UBL provides land to families living below the poverty line to plant Jatropha

• UBB is funded by state govt. & UBL; UBB finances SHGs for pro-duction of seedlings & NGOs for offering training. UBB responsible for price adaptation.

• UBL buys all seeds via tripartite agreements at fixed price of 3.5 Rs / kg (2008), via Forest Development Corporation;

• Incentives: UBL sets up large-scale expelling and transesterification unit. Subsidies for building up plantations: Beneficiaries are paid for pit digging and maintenance works via individual pay cheques from

Actors: Company UBL + state govt., via UBB Structures: Company- & Jatropha-centred approach with integrated, centra-lized processing at small-scale plantations (single value chain)

ANNEXES 175

UBB (but low guaranteed purchase price), though seeds are given for free by state; VAT exemption for biodiesel;

− Local consumption of SVO for electrification.

Source: Own compilation based on: Adholeya & Dadhich 2008, 21, 168-171; Altenburg et al. 2009, 7, 57-59; Lohia 2006; TERI & gtz 2005, 51, 65;

176 JANA LATSCHAN


Tamil Nadu

1st policy in 2004

− From 1.1.2003 5% blend with biofuel for diesel mandatory

− 2nd biofuel policy since 2006 (after failure of 1st input-oriented policy from 2004)

− Focus on Jatropha, in future also Pongamia

− Mainly use of private land

− Incentives: Exemption of seeds from purchase tax & SVO from VAT for first 10 years af-ter Commercialisation, State government: subsidizes seedlings (raised in state sup-ported nurseries of NGOs / SHGs / University with 1.5 Rs / seedling or 50% of planting material cost) /provides loans to agricultural cooperative banks for Jatropha-based con-tract farming (loan is bound to buy-back-agreement with company, currently only D1 Mo-han!) and subsidies for agro-processing extended to biodiesel

− Promotion of contract farming with selected companies like D1 Mohan Bio Oils Ltd., un-der different farming models depending on size of farm (small farmers: hedge plantations, larger farmers & absentee landlords: block plantations) & buy-back guarantee / extension services assured by pv. company

− Example: D1 Mohan Bio Oils Ltd. with the aim to plant 80,000 ha

Main actors: Company centred with state support, Structure: Mul-tiple farming model with focus on contract-farming;

No guaranteed purchase price set by state, subsidies for seedlings

Source: Own compilation based on: Altenburg et al. 2009, 7, 67-8; Chandel et al. 2007, 371; Francis et al. 2005, 17; GoTN (n.d.); GoTN 2007, 20 ; Negi et al. 2006, 25; Shiva 2008, 8

Source: Own table, based on the information as indicated for each state.

ANNEXES 177

Annex 6 Land holding patterns in India

Source: own graph based on Altenburg et al. 2009, 46, 91; Int. D1-BP; MoIB 2009,284;MoSPI2006.

178 JANA LATSCHAN

Annex 7 System variables Jatropha cultivation & JBD production

Source: Own table.

ANNEXES 179

Annex 8 Impact analysis integrated system variables Jatropha

Source: Own table.

180 JANA LATSCHAN

Annex 9 Consistency analysis condensed system variables Jatropha

Source: Own table.

ANNEXES 181

Annex 10 Result scenario analysis

Szenarioverteilung nach Konsistenzmaß

Anzahl Szenarien2502402302202102001901801701601501401301201101009080706050403020100

Kons

iste

nzm

aß

156

155

154

153

152

151

150

149

148

147

146

145

144

143

142

141

140

Source: Szeno Plan graph based on own consistency analysis.

182

Annex 11 Stakeholder assessment for JBD companies

Source: Own table based on Schaltegger et al. 2003, 167.

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